Beoz

We have no economy without the larger corporations. Catch 22.

knockoff nige

We have no economy without consumers, large corporations are incidental. And they are only required right now because they were allowed to grow as big as they are. Smaller organisations (and many of them) could not only fill the gap but they would provide competition on a much larger scale and might even provide value in something. Large corporations have removed value from everything. Their price setting goes unchallenged because they buy the competition. Apple and Google are great examples of that. Two companies that started with exceptional ideas, now only buying ideas and scrapping those they get bored with. Smaller companies seem to start with the intention of being bought.

Beoz

When was the last time you paid for something from Google?

I think you are looking at it from what the consumer wants - go out and buy some shares and you might see things a little differently. Google's share price has more than doubled in 5 years, and for most of us, we haven't paid Google a single cent to use it on a daily basis.

Because you've paid through the nose for Apple stuff you see it's value a little differently to Google.

That's exactly what you are talking about right?

knockoff nige

Well no. Obviously not. Google, regardless of share price or who actually buys what, they are buying up the competition from the small tech world. Apple are doing the same. Now, you do actually contribute quite a lot to Google but more so as a product than a consumer.

What if these small startup tech companies actually had a chance in the market and got to innovate, create and sell their unique ideas? Plus, not having to deal with the laughable patent system which enables a company like Apple or Google to have a design on paper, not actually make it to production (many of which are software patents) these small companies would be have far more open doors.

GarryP

OK, none of these are the whole story.

First, SMEs are better for local employment that multinationals. More of the jobs tend to be in the society that's directly, or indirectly, paying for them. Balance of trade is better AND you have a better market economy, since more niche exploration.

However, it takes large organisations to do certain things, and to get economies of scale. Two men and their dog aren't going to build a supertanker, or create a drone delivery system in a few years for that matter.

The problem comes in that the bigger the company, the more they can use internationalisation and tax tricks to reduce their payback to that specific society.

Fixing it means fixing 'free trade' - which isn't. It means a net positive contribution to society.

Which axiomatically means the primary obligation ISN'T to shareholders, it's to society.

knockoff nige

Nope. These large tech companies outsource their production to companies such as Foxconn. Design and RND is really where Apple and Google earn their money and if you move RND to other third parties, smaller tech companies can survive based on their ideas. Right now companies like Foxconn really have no alternative than to accept the terms of these tech Giants as if they don't do it, someone else will. Plenty of below average working environments because of that. We don't need large organisations, surely not the seize of Apple, Google or Walmart.

Beoz

I'd really like to see how much Google actually outsource to Foxconn.

R&D is an overhead. It doesn't make money. And before you tell me they make money in the future by how much they invest in R&D, well, which one of these saw the light of day.

Google Future Tech: 10 Coolest Google R&D Projects | CIO

You should work for a tech company one day - you might learn a thing or 2 about how much they spend on R&D and where they make their income from.

astera

Isn't all their gear outsourced? Nexus phones, etc.

I'm curious as to who builds the Pixel Chromebook...

knockoff nige

What do they actually build themselves? Do they actually do any manufacturing?

Google regularly release products whilst still in beta.

And I have worked for tech companies. Why claim otherwise when you have no way of knowing?

GarryP

R&D is a cash generator, not just in creating new products, but in creating new patents and IP. That's why high tech companies that stay around tend to pile what would otherwise be taxed profits into R&D - they get a return.

Pointing to individual activities really misses the point by a huge margin. Not only SHOULD your R&D not give the result intended half the time (if you are doing it right), it still creates the patents that can be used to carve out a slice of that pie.

I think google know what they are doing. And apple. And Amazon....

Beoz

Of the 74.54 billion google made in 2015, 67.39 billion was advertising revenue.

I didn't say they don't outsource to Foxconn, I said I would like to see how much Google outsource to Foxconn, which is sweet FA in the grand scheme of things.

Beoz

See above.

Beoz

HHmmm I think you will find that R&D, like marketing is linked to revenue. They invest in R&D and marketing when things are good.

Not to say R&D shouldn't be done, but taking that from the shareholder's pie is a tough one for shareholders to grapple with.

IP's and patents are more or less worthless in tech. You design something one year, someone else develops the same with a slight difference the next.

knockoff nige

Above didn't answer my question. They don't manufacture so they must get it done by someone. Your feeling that they don't outsource much doesn't mean anything.

GarryP

Err, almost exactly the reverse (its one of the problems with patents). They are the shock troops of commercial warfare - being used not only to defend against others, but attack as well - and extract tribute from secondary entities as well.

For instance, mickeysoft makes $2bn from licensing it's patents to just Android manufacturers - which is much more than they make from selling their own phones.

Put it this way, Google bought Motorola for the patents (which are the bit they kept when they sold it on). Mickeysoft bought Nokia for its patents (certainly wasn't for anything else). Worthless they certainly ain't.

And with the nice tax treatment they get, it's much better for a high tech company to fund R&D than take the profit and have to pay the taxman.