Can 2023 be the year of Small Tech?

Sid Mohasseb is adjunct professor in Dynamic Data-Driven Strategy at the University of Southern California.

2022 may be the year that historians declare the death of Big Tech. If so, 2023 may well be the year of Small Tech, where innovation, agility and value creation – all the things that allowed Big Tech to get big in the first place - return to our economy through an open, competitive environment with new, fragmented players.

This seems all but inevitable. Meta reported a drop in earnings for the first time since its founding. The industry has laid off more than 100,000 workers - and counting. Most significantly, Elon Musk’s takeover of Twitter has driven many users to niche, specialised alternatives. The genie is out of the Big Tech bottle.

Some say that Big Tech should never have been allowed to get so big. That’s understandable: the market cap of the five Big Tech U.S. companies is bigger than the economies of several mid-sized nations. But the real problem isn’t their size; the real problem is what Big Tech firms use their size and power for, and their effects on the U.S. economy and democracy.

The world’s best software engineers and coders are probably watching the mass layoffs underway in Silicon Valley and realising that job security and incomes are not guaranteed by Big Tech firms. Some may even be angry that since those firms bought out so many smaller competitors - and prevented new competitors from emerging by controlling so much talent - there are limited opportunities elsewhere.

A small number of laid off workers will become the entrepreneurial fuel for the next wave of innovation in tech, something that is desperately needed.

According to Dorothy Neufeld, over the last 250 years, we have witnessed multiple waves of innovation ranging from the Industrial Revolution to green tech. We are currently in the sixth wave –the shortest of them all - artificial intelligence, robots and clean tech. 

We need as much competition as possible to maximise this wave. We need as much talent solving as many problems as possible. We can’t have Big Tech, driven by the failed mantra “move fast and break things”, holding us back. Those inside the industry know this needs to happen, almost as much as those outside it: of more than 1,500 tech workers surveyed by Protocol in 2021, nearly 80% said that Big Tech companies have too much power. About 40% of those workers believed that tech does more harm than good, and an equal number said that big tech companies like Facebook, Amazon, Alphabet and Apple should be broken up.

Now, it appears as though they don’t need to be broken up by regulators. They are already being broken up by the creative destruction of the markets.

The next Steve Jobs or Bill Gates is likely sitting at a desk right now, getting paid a mid-six-figure salary just so they won’t leave and become a competitor to their current employer. I hope - for the sake of that person, and our economy – that they are a part of the current wave of layoffs.

Apple and Microsoft - the grandfathers of Big Tech - became so successful and changed the world because of competition. Today, a young Gates or Jobs is likely to be in the gilded cage of a tech job. They shouldn’t be; they should be out in the market, raising funds for their own ventures, and driving the sector forward.

This is already happening elsewhere. President Xi Jinping's call for China to "win the battle" in core technologies and investments in its semiconductor industry is in an effort to counter the U.S. stranglehold over the industry. While the European Union is preparing a slew of legislations aimed at reining in Big Tech.

Big Tech has ultimately let down its users, many of its investors, and alienated regulators and policymakers. Small Tech can provide the sustained growth that investors want, the competition that regulators want, and the benefits that users crave without some of the risks.

It is also what our economy - and our national security - needs.