Big Tech benefits research and development

The argument

The argument against breaking up the large technology companies here turns on what their scale makes possible rather than on what it lets them charge. Research and development is expensive, slow, and frequently unsuccessful, which means it can only be undertaken by organisations able to absorb years of expenditure without a return. The size and stability of the Big Tech companies allow exactly that. They can pursue longer-term goals than would be feasible for smaller companies, and in particular they can make the massive investments in R&D that a firm without deep reserves could not survive. The spending bears this out. Amazon, Apple, Facebook and Google's parent company Alphabet are all among the top fifteen companies in the world by R&D expenditure, with Alphabet and Amazon the first- and second-biggest spenders respectively. That is not a marginal presence in the global research effort; it places these four firms among the largest funders of private research anywhere, concentrated in an industry whose output other industries increasingly depend on. The conclusion proponents draw is that the usual charge has the effect backwards. Far from stifling innovation, the research these companies conduct and fund represents a vast support network for forward-looking innovators and inventors, who build on tools, platforms and findings they could not have produced themselves. A breakup would divide these firms into smaller companies, and smaller companies face precisely the constraint that made the spending possible in the first place: they cannot carry long-horizon research through years without payoff. The predictable consequence is that private sector R&D would be diminished significantly. Because Big Tech benefits research and development in this way, the argument concludes, the Big Tech companies should not be broken up.

Premises

Counter-arguments

These R&D investments in private terms are large, but most real breakthough innovation happens through public funding and university models. Value created through private R&D innovation in not generally shared with the public, but is sold back to them.

Rejecting the premises

[Rejecting P1] Corporate size is not what makes long-horizon research possible: publicly funded laboratories and universities work on longer horizons than any firm, and much of the foundational science these companies build on came from that sector. [Rejecting P2] Spending totals measure inputs rather than results, and a large share of corporate research budgets goes to incremental product development rather than to the breakthroughs the premise credits them with. [Rejecting P3] The premise assumes the research would vanish rather than be redistributed, when a break-up separates the units doing the work from a single owner; the counter adds that value created privately is sold back to the public rather than shared with it, which weakens the claim that the arrangement serves innovators generally.