{"id":47782,"date":"2023-10-20T15:55:05","date_gmt":"2023-10-20T15:55:05","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/weve-mistaken-the-rise-of-unicorns-as-a-sign-of-good-innovation-professor-rufus-black-startupsmart\/"},"modified":"2023-10-20T15:55:05","modified_gmt":"2023-10-20T15:55:05","slug":"weve-mistaken-the-rise-of-unicorns-as-a-sign-of-good-innovation-professor-rufus-black-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/weve-mistaken-the-rise-of-unicorns-as-a-sign-of-good-innovation-professor-rufus-black-startupsmart\/","title":{"rendered":"We’ve mistaken “the rise of unicorns” as a sign of good innovation: Professor Rufus Black – StartupSmart"},"content":{"rendered":"
\"\"<\/div>\n

\u201cWe have mistaken the rise of unicorns and tech giants as a sign of good innovation,\u201d said professor and strategic advisor Rufus Black.<\/p>\n

Speaking at the 2016 Creative Innovation conference in Melbourne in November, seconds after Donald Trump won the US election, the Ormond College master and ethicist asked: how did we get here?<\/p>\n

Read more: Tesla\u2019s Elon Musk joins Uber chief Travis Kalanick as Donald Trump\u2019s newest advisers<\/strong><\/a><\/p>\n

In San Francisco, home to some of the world’s leading tech companies, the concentration of wealth and power has come with high rates of poverty and crime across the inner city, according to the Wall Street Journal<\/em>.<\/p>\n

And while disruptive economies are creating unprecedented opportunities for startups to drive new value creation, Black believes the high failure rates and exits through mergers and acquisitions (M&A) isn’t good news.<\/p>\n

\u201c[There has been] a reduction in the ability of startups to scale in a meaningful way,\u201d said Black.<\/p>\n

\u201cWe\u2019re seeing the rise of oligopolies.\u201d<\/p>\n

Referencing an article published by The Economist<\/em>, Black said the increasing concentration of ownership has allowed a handful of tech companies to profit at unprecedented levels.<\/p>\n

\u201cThis means the fruits of economic growth are being hoarded,\u201d The Economist<\/em> reported earlier this year.<\/p>\n

The Economist<\/em> adds that since 2008, US companies have engaged in $US10 trillion ($13.8 trillion) worth of mergers, the largest round in American history:<\/p>\n

\n

\u201cBut high profits across a whole economy can be a sign of sickness. They can signal the existence of firms more adept at siphoning wealth off than creating it afresh, such as those that exploit monopolies. If companies capture more profits than they can spend, it can lead to a shortfall of demand \u2026 High profits can deepen inequality in various ways.\u201d<\/p>\n<\/blockquote>\n

Black argued the ongoing acquisition of small companies by the likes of Facebook and Google is creating an \u201canti-competitive\u201d environment.<\/p>\n

\u201cHow? They use their network effects to dominate,\u201d he said.<\/p>\n

His words echo those of Australian Competition and Consumer Commission chairman Rod Sims, who recently questioned whether the watchdog should keep an eye on the rise of tech companies and their effects on the market, especially for new and small players.<\/p>\n

Read more: What tech entrepreneurs think about the ACCC regulating startup acquisitions<\/strong><\/a><\/p>\n

\u201cWe need to take a view on whether this sort of activity is taking out future competition and entrenching the incumbent,\u201d said Sims<\/a>.<\/p>\n

\u201cOf course we understand that sometimes when a big bank or a big company buys a startup, they can get the ideas and products out to the market more quickly, but if this is taking out a company that looks like a serious future competitor then I think we have to look at it differently.\u201d<\/p>\n

Black added that small players in the market don\u2019t have the financial power to use regulation or regulators like the ACCC to their advantage.<\/p>\n

\u201c[Oligopolies] use patents in ways that restrict competition,\u201d he says.<\/p>\n

\u201cApple shouldn\u2019t have been allowed to patent rounded corners.”<\/p>\n

Creating a more inclusive tech sector<\/h3>\n

The trend can be reversed, said Black, who believes \u201cmuch can be done to fix this problem.”<\/p>\n

Black, who helped establish the Wade Institute of Entrepreneurship at Ormond College in Melbourne, believes more should be done to reduce the concentrated power of large companies. He wants harder and tougher action so smaller companies have a fighting chance of surviving longer. He suggests setting the bar higher on mergers and acquisitions so they don\u2019t undermine competition, and he wants genuine protections for new players in the market.<\/p>\n

\u201cWe need to think about how we open new networks so it\u2019s more collaborative and inclusive,\u201d he said.<\/p>\n

In line with this, Black called for a \u201cfresh look\u201d on intellectual property.<\/p>\n

\u201cForty to ninety percent of patents aren\u2019t used by the owners, if you can\u2019t use it \u2013 you should lose it,\u201d he said.<\/p>\n

\u201cWe need to be able to ensure that technology becomes more available to a wider group of people.\u201d<\/p>\n

Read more: John Oliver rips into \u201chorrifying\u201d patent trolls: Why startups should take notice<\/strong><\/a><\/p>\n

And as tech companies and the digital age takes over, he said startups are only a small piece of the puzzle.<\/p>\n

\u201cWe definitely have to work on skilling up the population,\u201d said Black.<\/p>\n

\u201cThe role of startups is, yes to create jobs, [but] we\u2019ve got to create startups that grow [and] create conditions for growth so a range of jobs is created.\u201d<\/p>\n

Follow StartupSmart on Facebook, Twitter, LinkedIn and iTunes. <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

\u201cWe have mistaken the rise of unicorns and tech giants as a sign of good innovation,\u201d said professor and strategic advisor<\/p>\n","protected":false},"author":2,"featured_media":58349,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9,28,6,1,26],"tags":[],"_links":{"self":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/47782"}],"collection":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/comments?post=47782"}],"version-history":[{"count":0,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/47782\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media\/58349"}],"wp:attachment":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media?parent=47782"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/categories?post=47782"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/tags?post=47782"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}