Business & Industry

Cisco's turn from innovation to financialization and what it means for the competitive position of the US information-and-communication-technology industry

Cisco Systems: From innovation to financialization

Once the global leader in telecommunication systems and the Internet, over the past two decades, the United States has fallen behind global competitors, including China, in mobile-communication infrastructure—specifically 5G and Internet of Things (IoT). This national failure, with the socioeconomic and geopolitical tensions that it creates, is not due to a lack of US government investment in the knowledge required for the mobility revolution. Nor is it because of a dearth of domestic demand for the equipment, devices, and applications that can make use of this infrastructure. Rather, the problem is the dereliction of key US-based business corporations to take the lead in making the investments in organizational learning required to generate cutting-edge communication-infrastructure products.

The advent of military Keynesianism is a warning against complacency about the moral superiority of the West in defending Ukrainian democracy.

The war in Ukraine features in our consciousness as resistance to invasion, with the West playing a leading part in supplying military hardware and imposing sanctions on Russia, consequently breaking down international free trade, regulating international payments, and boosting food and energy price inflation. But the war is also changing us with the emergence of a new role for the state in the countries supporting Ukraine’s resistance.

Corporate responsibility needs to evolve if businesses are going to rebuild trust and provide real value for society.

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How big tech barons crush innovation—and how to fight back

In late 2017, the European Commission asked us to research innovation in the digital economy. Our earlier work, including Virtual Competition, raised the concern of policymakers around the world as we uncovered several significant risks of the digital economy including algorithmic collusion. But on innovation, we, like many others, were optimistic and trusted in the market’s ability to deliver. As we dug into the data over the next few years, however, we found multiple fallacies about innovation in the digital economy. Our counterintuitive findings were unsettling.

Financial Times columnist and author Rana Foroohar talks about her new book Homecoming: The Path to Prosperity in a Post-Global World

Economist Cristina Caffarra, a leader in competition and antitrust, warns that ever-expanding tech giants raise concerns about the extent of their power.

Since the 1970s, economists buying into the Chicago School of Antitrust have waved off the dangers of lax antitrust policies, professing that “the market” would sort out issues of competition and punish companies that abuse size and power. The Chicagoans’ narrow focus on direct consumer costs as the sole measure of harm didn't consider the impact of consolidation on small businesses, start-ups, workers, or, for that matter, democratic norms. Nor did it raise red flags for tech platforms that were touted as “free” for users (while monetizing our attention and personal data).

A growing number of critics argue that these basic assumptions are both wrong and outdated, as evidenced by the fact that in many industries, particularly technology, companies have been growing to gargantuan proportions and, as anybody who owns a smartphone is painfully aware, they seem free to gobble competitors, hinder innovation, and serve up crappy, overpriced products.

Evidence sharply contradicts PhRMA’s contention that its member companies need unregulated drug prices to generate profits that they then reinvest in drug innovation.

Congress finally takes action, with the predictable PhRMA reaction

The Consumer Welfare Standard is severely limited or defective, preventing it from being an appropriate standard for modern antitrust.

Despite the accumulation of serious and unsolvable problems, the Consumer Welfare Standard survives and continues to be taught to students for reasons unrelated to theoretical consistency and empirical confirmation.

How Showering Money on Both Parties Paralyzed Regulators

Late last week, Samuel Bankman-Fried, in the eyes of many our century’s answer to 18th-century fraudster John Law, Charles Ponzi, and the con artists who puffed tulips back in the Dutch Golden Age, allowed that he would be willing to testify before the House Committee on Financial Services. Curiously, for someone usually so eager to jump on stages where he could trumpet his determination to make the world a better place, Mr. Bankman-Fried was far more tentative about the possibility of appearing before the Senate Banking Committee.