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"A third of the rise in the S&P 500 stock market index this year is attributable to Apple Inc., Amazon.com Inc., Google parent Alphabet Inc., Facebook Inc. and

"A third of the rise in the S&P 500 stock market index this year is attributable to Apple Inc., Amazon.com Inc., Google parent Alphabet Inc., Facebook Inc. and Microsoft Corp." And yet don't those companies directly employ only around 150,000 workers in total? Yes, Apple off-shores employment to Foxconn but they are open about their plans to automate their factories and replace all the workers. This isn't a matter of patience, it's waiting on the never-never.

lifeisstillgood 9y ago
that's not the argument the article was making - they note that tech and media (the fastest growing sectors, which not coincidentally employ most intensively IT workers) are just 5% of economy. the argument is that when the rest of the economy employs IT at the same level of intensity, the remaining 95% will have similar productivity growth and hence see gains of wealth creation. we then have to work out how to distribute those gains (hopefully fairly and equitably) There is a oft quoted parallel with electricity replacing steam in factories- it took a generation or more for factories to stop being clustered around one large steam engine, running each corner of the factory to the speed of one central spindle. the idea is that eventually companies will adapt to use "Digital" rather than adapting digital to fit them. As a mental sanity check, think about just how, ignoring ML/AI, just how advanced you could rewrite any company you have worked in in past ten years. All the crappy inefficiencies, the pointless spreadsheets. And you have probably worked at the tech end of the economy. is today's IT usage really the best we can do as a society? i doubt it - there seems to be a lot of room for improvement...
- TheOtherHobbes 9y ago
  The limits are human - psychological, emotional, political - not technological. So yes - today's limits probably are the best we can do, in this society at least. Also, just because it's "obvious" that it's possible to re-engineer a company's code base, that doesn't mean it's as easy as it looks.
  - mistermann 9y ago
    There's a way around human nature in this case: one company can do it efficiently and force the others to do the same, or go out of business. Not that common though really.
    - unreal37 9y ago
      It took the success of Uber for my local cab companies to offer an app to order a ride, and cut the prices for a taxi. I doubt it would have happened without that. So it happens quite a bit actually.
hliyan 9y ago
That's really not the author's point. I think this quote illustrates his point better: "Online shopping came along in the 1990s but retailers struggled to adapt business processes to the internet. They needed to build complementary infrastructure such as fulfillment centers, and, the authors note, customers had to adapt their habits, as well." The lag between commercialization and widespread adoption is wider than we think.
- heisenbergs 9y ago
  Lag is probably the wrong word. It's a misconception that adoption should be instant. It took a good 50 years for the electric motor to supplant the steam engine, despite it being superior in virtually every way. Tech adoption takes time, given that many things need to be re-learnt/engineered. It's why i'm positive that there won't be swathes of unemployeed people due to tech. It will happen gradually, as it has always been, and people will have to be shifted into different and more productive employment types. It has always happened this way, and will likely continue to do so.
  - hateduser2 9y ago
    I don’t think “it’s always happened this way so it probably will continue “ (although you explain this further) is a very sophisticated or for that matter accurate analysis. There’s the status quo and then there are major events that upend it. If anything could ever upend the status who like this, it’s tech. It’s like business cycles.. usually things are fine but they aren’t always fine.
  - starlust2 9y ago
    Converting a user operated machine from a steam engine to electric engine doesn't remove the user. Converting to a computer operated or assisted machine does.
    - icebraining 9y ago
      If the electric engine can produce the same things ten times faster, you've just removed nine-tenths of the users. Sure, someone is still around, but then again, automatic factories still have some people supervising them - just much fewer.
heisenbit 9y ago
Yeah, that part made me cringe. The fact that the majority of the profits are accumulating at a few players is actually a sign of a late stage market after consolidation with monopoly profits. Productivity gains only drive profits if they provide a sustainable competitive advantage. There is a reason Buffet stays from IT - we improve productivity all the time but he can't figure out where the moat is. Apple (iOS/Hardware engineering), Amazon (Warehouse, Scale), Google (Advertisement market leader), Facebook (Attention) and Microsoft (Office) have some form of sustainable moat. The broad market less so.
- aristidb 9y ago
  Fun fact: Berkshire Hathaway (Buffett's company) now has a huge stake in Apple. So it's not really true anymore that he avoids IT.
  - bob_theslob646 9y ago
    It's not because of the IT dominance per say, it this: "Apple's mound of cash and cash equivalents continued to scrape the cloudline this quarter, coming in at $268.9 billion in the company's quarterly earnings report." (https://www.cnbc.com/2017/11/02/how-much-cash-does-apple-have.html https://www.cnbc.com/2017/11/02/how-much-cash-does-apple-hav...) He is betting that in some shape or form, they will put that cash to work or issue a nice dividend.
    - addicted 9y ago
      The Apple investment is probably driven by similar principles as their Coca Cola investment.
    - fishcolorbrick 9y ago
      "Apple's mound of cash and cash equivalents continued to scrape the cloudline..." Cloudline is being modest... a stack of a trillion dollars in singles will take you 25% of the way to the Earth's moon. https://www.wired.com/2011/09/stacking-one-trillion-dollars/ https://www.wired.com/2011/09/stacking-one-trillion-dollars/
deleted 9y ago
[deleted]
ameister14 9y ago
At first glance, Amazon alone employs more than half a million people. Microsoft is over 100k, Apple is about 80k in the US, google's about 60k, and Facebook is around 17k.
- CydeWeys 9y ago
  I think that figure for Alphabet is off by at least a factor of two. Are we including staff worldwide, or just US-based staff? Full-time employees only, or also all contracted workers?
  - ameister14 9y ago
    It was off by about 15k, apparently. https://www.recode.net/2017/7/24/16022210/alphabet-google-employment-employees-doubled-headcount https://www.recode.net/2017/7/24/16022210/alphabet-google-em...
    - CydeWeys 9y ago
      That's only the headcount for full-time employees. You've got to at least double it to account for all the contractors as well.
      - lostlogin 9y ago
        That ends up being rather circular though doesn’t it? Eg Amazon likely has someone who they employ but is contracted to sort of Netflix stuff. Who’s employee count do they add to?
        CydeWeys 9y ago
        It's not circular at all. Every single one of the employees I have in mind can be accounted for by Alphabet and Alphabet alone. We're talking security guards, cafe staff, customer support, janitors, receptionists, massage therapists, doctors, physical therapists, and any of dozens of different types of line of business stuff that doesn't use permanent employees (could be as simple as running the Google Books scanners or processing returned hardware). It's pretty simple to determine -- Who's paying the salary? Your example, of a contractor who is employed by Amazon to work on Netflix integrations for Amazon products, would count for Amazon, as the work is paid for by Amazon and is for Amazon's benefit. It wouldn't count for Netflix; we're only talking about employees whose salaries are being directly paid for by a company, not larger second-order ecosystem-type effects. That gets a lot harder. What I'm talking about is exact.
taneq 9y ago
In before all the posts lamenting "AAAFM" and its various impacts on the tech community without explaining that it refers to Apple, Amazon, Alphabet, Facebook and Microsoft.
- Eridrus 9y ago
  Journalists should just start calling them the FAAAM.

lifeisstillgood 9y ago

that's not the argument the article was making - they note that tech and media (the fastest growing sectors, which not coincidentally employ most intensively IT workers) are just 5% of economy. the argument is that when the rest of the economy employs IT at the same level of intensity, the remaining 95% will have similar productivity growth and hence see gains of wealth creation. we then have to work out how to distribute those gains (hopefully fairly and equitably) There is a oft quoted parallel with electricity replacing steam in factories- it took a generation or more for factories to stop being clustered around one large steam engine, running each corner of the factory to the speed of one central spindle. the idea is that eventually companies will adapt to use "Digital" rather than adapting digital to fit them. As a mental sanity check, think about just how, ignoring ML/AI, just how advanced you could rewrite any company you have worked in in past ten years. All the crappy inefficiencies, the pointless spreadsheets. And you have probably worked at the tech end of the economy. is today's IT usage really the best we can do as a society? i doubt it - there seems to be a lot of room for improvement...

TheOtherHobbes 9y ago
The limits are human - psychological, emotional, political - not technological. So yes - today's limits probably are the best we can do, in this society at least. Also, just because it's "obvious" that it's possible to re-engineer a company's code base, that doesn't mean it's as easy as it looks.
- mistermann 9y ago
  There's a way around human nature in this case: one company can do it efficiently and force the others to do the same, or go out of business. Not that common though really.
  - unreal37 9y ago
    It took the success of Uber for my local cab companies to offer an app to order a ride, and cut the prices for a taxi. I doubt it would have happened without that. So it happens quite a bit actually.

hliyan 9y ago

That's really not the author's point. I think this quote illustrates his point better: "Online shopping came along in the 1990s but retailers struggled to adapt business processes to the internet. They needed to build complementary infrastructure such as fulfillment centers, and, the authors note, customers had to adapt their habits, as well." The lag between commercialization and widespread adoption is wider than we think.

heisenbergs 9y ago
Lag is probably the wrong word. It's a misconception that adoption should be instant. It took a good 50 years for the electric motor to supplant the steam engine, despite it being superior in virtually every way. Tech adoption takes time, given that many things need to be re-learnt/engineered. It's why i'm positive that there won't be swathes of unemployeed people due to tech. It will happen gradually, as it has always been, and people will have to be shifted into different and more productive employment types. It has always happened this way, and will likely continue to do so.
- hateduser2 9y ago
  I don’t think “it’s always happened this way so it probably will continue “ (although you explain this further) is a very sophisticated or for that matter accurate analysis. There’s the status quo and then there are major events that upend it. If anything could ever upend the status who like this, it’s tech. It’s like business cycles.. usually things are fine but they aren’t always fine.
- starlust2 9y ago
  Converting a user operated machine from a steam engine to electric engine doesn't remove the user. Converting to a computer operated or assisted machine does.
  - icebraining 9y ago
    If the electric engine can produce the same things ten times faster, you've just removed nine-tenths of the users. Sure, someone is still around, but then again, automatic factories still have some people supervising them - just much fewer.

heisenbit 9y ago

Yeah, that part made me cringe. The fact that the majority of the profits are accumulating at a few players is actually a sign of a late stage market after consolidation with monopoly profits. Productivity gains only drive profits if they provide a sustainable competitive advantage. There is a reason Buffet stays from IT - we improve productivity all the time but he can't figure out where the moat is. Apple (iOS/Hardware engineering), Amazon (Warehouse, Scale), Google (Advertisement market leader), Facebook (Attention) and Microsoft (Office) have some form of sustainable moat. The broad market less so.

aristidb 9y ago
Fun fact: Berkshire Hathaway (Buffett's company) now has a huge stake in Apple. So it's not really true anymore that he avoids IT.
- bob_theslob646 9y ago
  It's not because of the IT dominance per say, it this: "Apple's mound of cash and cash equivalents continued to scrape the cloudline this quarter, coming in at $268.9 billion in the company's quarterly earnings report." (https://www.cnbc.com/2017/11/02/how-much-cash-does-apple-have.html https://www.cnbc.com/2017/11/02/how-much-cash-does-apple-hav...) He is betting that in some shape or form, they will put that cash to work or issue a nice dividend.
  - addicted 9y ago
    The Apple investment is probably driven by similar principles as their Coca Cola investment.
  - fishcolorbrick 9y ago
    "Apple's mound of cash and cash equivalents continued to scrape the cloudline..." Cloudline is being modest... a stack of a trillion dollars in singles will take you 25% of the way to the Earth's moon. https://www.wired.com/2011/09/stacking-one-trillion-dollars/ https://www.wired.com/2011/09/stacking-one-trillion-dollars/

deleted 9y ago

[deleted]

ameister14 9y ago

At first glance, Amazon alone employs more than half a million people. Microsoft is over 100k, Apple is about 80k in the US, google's about 60k, and Facebook is around 17k.

CydeWeys 9y ago
I think that figure for Alphabet is off by at least a factor of two. Are we including staff worldwide, or just US-based staff? Full-time employees only, or also all contracted workers?
- ameister14 9y ago
  It was off by about 15k, apparently. https://www.recode.net/2017/7/24/16022210/alphabet-google-employment-employees-doubled-headcount https://www.recode.net/2017/7/24/16022210/alphabet-google-em...
  - CydeWeys 9y ago
    That's only the headcount for full-time employees. You've got to at least double it to account for all the contractors as well.
    - lostlogin 9y ago
      That ends up being rather circular though doesn’t it? Eg Amazon likely has someone who they employ but is contracted to sort of Netflix stuff. Who’s employee count do they add to?
      - CydeWeys 9y ago
        It's not circular at all. Every single one of the employees I have in mind can be accounted for by Alphabet and Alphabet alone. We're talking security guards, cafe staff, customer support, janitors, receptionists, massage therapists, doctors, physical therapists, and any of dozens of different types of line of business stuff that doesn't use permanent employees (could be as simple as running the Google Books scanners or processing returned hardware). It's pretty simple to determine -- Who's paying the salary? Your example, of a contractor who is employed by Amazon to work on Netflix integrations for Amazon products, would count for Amazon, as the work is paid for by Amazon and is for Amazon's benefit. It wouldn't count for Netflix; we're only talking about employees whose salaries are being directly paid for by a company, not larger second-order ecosystem-type effects. That gets a lot harder. What I'm talking about is exact.

taneq 9y ago

In before all the posts lamenting "AAAFM" and its various impacts on the tech community without explaining that it refers to Apple, Amazon, Alphabet, Facebook and Microsoft.

Eridrus 9y ago
Journalists should just start calling them the FAAAM.