'Big Tech': end of an era

09 January 2023

It seems that the golden years are over for internet giants such as Meta (Facebook), Amazon, Google, Salesforce and other Twitters. The turnover figures and share prices have taken a big hit and the axe is also being put in the workforce. More than a temporary slump, it seems that the internet sector has reached a turning point in its development, even a peak has passed. It's looking forward to what the next big wave of technology will be.

Needless to say, the past year 2022 was in many ways a turning point in modern history. A year that will cast its shadow far ahead. I spoke here earlier about a situation of rapid successive and mutually reinforcing crises: 'permacrisis'. Of the coronavirus that keeps rearing its head over the runaway inflation figures and the imminent threat of an economic recession. Not to mention the global warming that also caused uncomfortable heat records for us between New Year's Eve.

Against that background, the slump of the internet giants seems a marginal phenomenon, but no less relevant to the future. In any case, it will not be a temporary phenomenon, rather symptoms of an impending trend break. Computers, mobile phones, the internet, social media and e-commerce have had golden years. The engineers of the American company Intel who developed the first microprocessor half a century ago, probably could not have imagined at that time what technological revolution they would start. Not to mention the impact on our personal lives and wider society.

The researcher Carlota Perez already labeled information and communication technology a quarter of a century ago as the most important technology wave of modern times. Such a wave is characterized by an important innovation (in this case the Intel microprocessor in 1971), on which a real 'gold rush' arises, followed by a bubble that bursts at some point (in this case, the dotcom crisis of the beginning of the century). Many gold miners go down soullessly, but a few are sufficiently crisis-resistant and manage to grow into new giants (Apple, Microsoft, Google, Amazon). But such a wave also reaches a maturity phase at some point, a peak of technology (presumably in 2022). And from then on it invariably goes downhill.

A similar pattern occurred in the past, for example for the steel and coal industries that defined the face of the first half of the 20th century. Or after the Second World War: petroleum, chemistry or cars powered by fossil fuel. The companies that have grown up because of these new, groundbreaking technologies are trying to reach their peak, extend their life cycle by adapting, and forced to switch (think of the car industry today that is betting massively on electric motors, or petroleum company that is going 'green'). In many cases, this is accompanied by mass redundancies, restructuring, mergers or splitting up of activities. Sometimes they fight an ultimate agony, like the steel and coal industry in the 1970s-1980s. Technology waves show a deterministic trait.

A lot suggests that the internet giants are also over their peak today, or tomorrow. But they will do everything they can to survive by extending extensions to their core technology, or business model, with new applications for users (think AR/VR/Metaverse for Facebook, Microsoft and Apple). A few will remain healthy, mature companies for many years to come, a bit boring too. Some will never be completely gone, because we will remain largely (too) dependent on them (think of mobile phones), but their dominant economic and social position will gradually fade away, or remain under pressure from self-conscious consumers and governments. Something that innovation guru Rik Vera is increasingly convinced of in informal conversations.

Of course, the key question remains what will be the technology of the future, the new gold of tomorrow? Some have been focusing on the bio-tech for years, others on artificial intelligence (AI). Carlota Perez talks about sustainable technologies in a number of recent lectures. Let's be honest and stay sober: no one can predict the sacred technology grain of the future today. Again, many will feel called, but few will be chosen. History does not repeat itself, it only rhymes, says the proverb. What has been will never come back, but the future will look a bit like the past, especially when it comes to the patterns of technology waves.

Whatever or whoever it may be, the future has at least begun.