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The Tech Sector Is Leaving the Rest of the US Economy In Its Dust (theverge.com)

Posted by BeauHD on from the speed-racer dept.

Yesterday afternoon, the S&P 500 closed at a record high, and is up over $1.5 trillion since the start of 2017. "And the companies doing the most to drive that rally are all tech firms," reports The Verge. "Apple, Alphabet, Facebook, Amazon, and Microsoft make up a whopping 37 percent of the total gains." From the report: All of these companies saw their share prices touch record highs in recent months. This is in stark contrast to the rest of the U.S. economy, which grew at a rate of less than 1 percent during the first three months of this year. That divide is the culmination of a long-term trend, according to a recent report featured in The Wall Street Journal: "In digital industries -- technology, communications, media, software, finance and professional services -- productivity grew 2.7% annually over the past 15 years...The slowdown is concentrated in physical industries -- health care, transportation, education, manufacturing, retail -- where productivity grew a mere 0.7% annually over the same period." There is no industry where these players aren't competing. Music, movies, shipping, delivery, transportation, energy -- the list goes on and on. As these companies continue to scale, the network effects bolstering their business are strengthening. Facebook and Google accounted for over three-quarters of the growth in the digital advertising industry in 2016, leaving the rest to be divided among small fry like Twitter, Snapchat, and the entire American media industry. Meanwhile Apple and Alphabet have achieved a virtual duopoly on mobile operating systems, with only a tiny sliver of consumers choosing an alternative for their smartphones and tablets.

7 of 155 comments (clear)

  1. Bubble by Anonymous Coward · · Score: 3, Insightful

    I'm going to cash out my stock options and ESPP as soon as they vested. Tax penalties be damned. I'd rather lose 20% of the value to taxes than 80% of the value to a crash.

    1. Re:Bubble by unixisc · · Score: 4, Insightful

      Of all the above, Apple is the only company that actually manufactures, and can bring jobs back to the US. The others - Alphabet, Microsoft, Facebook & Twitter, don't make squat (okay, Alphabet does a bit w/ the Pixel). And it's just as easy for them to offshore work as it is to hire within the US, since most software jobs now are remote jobs that can be done on 'the cloud'.

      You could try shorting Snap, Inc stocks: those are definitely overvalued, and given that their main selling point is that kids love them, kids can just as easily do to them what they did to MySpace. But I thought that the value you'd lose to taxes would be more like 27% or thereabouts.

    2. Re: Bubble by PoopJuggler · · Score: 1, Insightful

      So the welders are robots and somehow that's bringing welding jobs back...

  2. Digital advertising by Anonymous Coward · · Score: 4, Insightful

    Digital advertising isn't an industry.

    At best it is a digital parasite.

  3. This isn't surprising by rsilvergun · · Score: 5, Insightful

    The #1 cost of most things are the raw materials needed to product followed by the labor (and their benefits). Tech needs almost nothing to produce since it includes software and even then needs a fraction of the employees of most sectors. Tech has amazing ROI because you just plain don't need to invest very much.

    The trouble is that a lot of tech is either useless (Twitter) or evil (Uber).

    --
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    1. Re:This isn't surprising by Anonymous Coward · · Score: 3, Insightful

      Not Surprising?!?!?????

      I'll tell you what's surprising.....

      These tech companies are all being successful due to two very simple reasons...

      1) Selling you stupid bleeding edge shit you don't really *need*.

      2) Selling your soul out to the devil via datamining your ass 24x365 live in realtime via all microphone video chat gps purchases habits photos *including* the last time you jacked off to Britney Spears. They buy, sell, and have it *ALL*, your entire LIFE on their backend. Ruling over and engineering you is a total greenfield.

      AND YOU FUCKING IDIOTS FUCKING GAVE IT TO THEM, ALL OF IT, WITHOUT SO MUCH AS ASKING FOR A PENNY OF THE PROFIT AND EVERLASTING CONTROL THEY NOW HAVE OVER YOU.

      Fucking idiots.

  4. What idiot... by Nutria · · Score: 5, Insightful

    conflates the "stock market" with "the economy"????

    Oh, right: journalists. I'd be unhappy as hell if my kids became lawyers, but kill the one that becomes a journalist.

    --
    "I don't know, therefore Aliens" Wafflebox1