{"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":"
\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 \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\n