The Truth of The Undesirable State of the Current Tech Industry
I'm a software engineer in the tech industry who has thrived from the increase in demand for coders through the years. I remember when I started programming on my own in 2016, how it wasn't a well-known skill and how family and friends around me had thought my little hobby to be a time-waster.
Then I went to college in the United States in 2017. Being in UCLA, where the internet was born and being in the same state where Silicon Valley was in, it exposed me to the marvels of tech and the tech industry. I knew of peers who had started startups, heard of friends whose classmate was the nephew of Elon Musk (who I heard, went on to work at SpaceX), inadvertently was chaffeured in a Tesla when it hadn't yet made public news. Tech was all around me, and it was only there where my programming skills flourished through leading a coding club and applying programming to everything from research to being a layout editor for a student arts publication (I made a digital magazine that I shamelessly put my own digital art on).
Truly, being a software engineer and seeing the tech industry grow and thrive was a marvellous thing.
But it was also being at the heart of it all that I realized how much power the tech industry held.
In 2019, I had a short working stint at the Chamber of Digital Commerce (now known as the Digital Chamber), which was then the world's largest blockchain trade association based in Washington DC.
Oh yea, I know what you're thinking: I guess I was considered a cryptobro? Haha 😂
In that stint, I was exposed to the power of the tech industry. I had the privilege to sit into a congressional hearing on Libra, then a cryptocurrency that Facebook, now known as Meta, had planned to launch together with 28 founding partners, which included Mastercard, Visa, eBay, and a number of other companies.
Image from It was a huge deal for the US government as to policymakers, it threatened to overthrow the power of the US dollar and the power of the Federal Reserve. Facebook had also wanted to locate its headquarters in Switzerland, justifying that it was a finance hub, which to US policymakers, meant it would not be creating American jobs. More than that, it was the fear of the amount of power that this would give already poewrful tech players like Facebook - now that it could control the flow of money. Complemented with its almost absolute control ofthe flow of information through social media, that was ALOT of power vested in just a few players.
I also saw firsthand how powerless the average policymaker was due to tech illiteracy. Most of the policymakers did not have a grasp of blockchain, and could not question Mark Zuckerberg then very well. He could smartly evade most of the questions by feigning ignorance and confusion, leaving the policymakers frustrated and helpless.
I'm sure this is not the first time you've heard of this - it's the same story we're seeing over and over again - for example when Bytedance's CEO was questioned in the US Congress. Oh the number of memes that that one hearing generated!
The point I'm making, is that big tech truly is powerful. And alot of its power comes from its economic structure.
The Economics of Big Tech
The tech industry today operates as what economists call an oligopoly - a market structure dominated by a small number of large firms. And the numbers are staggering.
As of 2024, just five companies - Apple, Microsoft, Google (Alphabet), Amazon, and Meta - control over 60% of the entire U.S. tech market capitalization. Apple and Microsoft alone are worth over $3 trillion each. In search, Google commands approximately 92% of the global market share. In social media, Meta's family of apps (Facebook, Instagram, WhatsApp) reaches over 3 billion users. Amazon controls nearly 40% of U.S. e-commerce and over 30% of the cloud computing market through AWS.
This concentration of power hasn't gone unnoticed by regulators. Enter Lina Khan, who became chair of the Federal Trade Commission (FTC) in 2021 at just 32 years old. Khan made her name with her groundbreaking 2017 Yale Law Journal article "Amazon's Antitrust Paradox," which challenged traditional antitrust thinking that focused solely on consumer prices.
Under Khan's leadership, the FTC has taken an aggressive stance against big tech monopolies. The agency has sued Meta to unwind its acquisitions of Instagram and WhatsApp, blocked Microsoft's $69 billion acquisition of Activision Blizzard (though it eventually went through), and filed antitrust lawsuits against Amazon for allegedly maintaining monopoly power through anti-competitive practices.
Khan's approach recognizes that monopolies harm more than just consumer prices - they stifle innovation, reduce worker bargaining power, and concentrate economic and political power in ways that threaten democratic institutions. And she's right.
Monopolies Aren't Good for the Economy
The economic case against monopolies is well-established, yet somehow we've allowed tech giants to consolidate power in ways that would have been unthinkable in previous eras.
Research from the National Bureau of Economic Research shows that increased market concentration has led to a decline in business dynamism - fewer startups are being created, and those that are created grow more slowly. A 2019 study published in the American Economic Review found that rising market power has contributed to declining labor share of income, meaning workers are getting a smaller piece of the economic pie.
The figures show the decline in firm and establishment enry rates in the United States along with an increase in the average markup of large publicly traded firms since 1980s, suggesting a rise in the market power of large firms as business dynamism declines. Image from https://www.federalreserve.gov/econres/notes/feds-notes/what-happened-to-us-business-dynamism-20200214.html
When a few companies dominate a market, they have less incentive to innovate. Why invest in risky R&D when you can simply acquire any potential competitor before they become a threat? Facebook's acquisition of Instagram for $1 billion in 2012 and WhatsApp for $19 billion in 2014 are textbook examples of this "kill zone" strategy - buying up potential competitors before they can challenge your dominance.
Monopolies also create what economists call "deadweight loss" - economic inefficiency where potential gains from trade are not realized. When companies don't face competitive pressure, they can charge higher prices, offer lower quality, and invest less in innovation. The result is a less dynamic, less innovative economy that benefits shareholders and executives while leaving workers and consumers worse off.
Perhaps most concerning is the impact on entrepreneurship. When would-be founders know that any successful startup will either be acquired by or crushed by an incumbent, the incentive to innovate diminishes. Why take the risk of building something new when the best-case scenario is a buyout and the worst-case is being put out of business by a company with effectively unlimited resources?
The Attention Economy and How We're Being Manipulated
In the attention economy, you're not the customer - you're the product. And when monopolies control the platforms where we spend our time, the consequences go far beyond economics.
Image from https://www.techdetoxbox.com/weapons-of-digital-manipulation/how-attention-economy-works/
Meta, Google, and TikTok don't charge users money because they've found something far more valuable: our attention. These platforms have become extraordinarily sophisticated at capturing and monetizing every second we spend scrolling, watching, and clicking. The average person spends over 2.5 hours per day on social media, and that's not by accident - it's by design.
These companies employ teams of psychologists, neuroscientists, and behavioral economists to make their products as addictive as possible. Features like infinite scroll, push notifications, and algorithmic feeds that show us increasingly extreme content are all designed to maximize "engagement" - a sanitized term for keeping us hooked.
But here's where the monopoly aspect becomes critical: when there are no real alternatives, we can't vote with our feet. Sure, you could delete Instagram, but where will you go? All your friends are there. Your favorite creators post there. Events are organized there. The network effects that made these platforms successful in the first place now trap us in them.
The cost to consumers isn't just measured in time wasted or mental health impacts (though those are significant). It's also in the erosion of privacy, the manipulation of our political discourse, and the commodification of our most intimate moments. When a handful of companies control the primary channels through which we communicate, learn, and form opinions, they wield unprecedented power over society itself.
And because these platforms operate as monopolies, they face little pressure to change. Where else are you going to go?
The Impact on Children: A Crisis We Can't Ignore
If the attention economy is harmful for adults, it's catastrophic for children. Jonathan Haidt's book "The Anxious Generation" documents how the rise of smartphone-based childhood has coincided with an unprecedented mental health crisis among young people. Between 2010 and 2019, rates of depression among adolescents increased by 145% for girls and 161% for boys. Anxiety, self-harm, and suicide rates have all spiked in tandem with social media adoption.
But what makes it more sinister is that these companies know exactly what they're doing.
In 2021, whistleblower Frances Haugen, an ex-product manager at Meta, leaked internal Meta documents revealing that the company had conducted extensive research into Instagram's effects on teenage girls. The research found that 32% of teen girls said that when they felt bad about their bodies, Instagram made them feel worse. One internal presentation stated: "We make body image issues worse for one in three teen girls."
But this wasn't framed as a study to fix the platform. According to the leaked documents, Meta used this research to create detailed user personas of vulnerable teenage girls - understanding their insecurities, their triggers, their patterns of use. The goal wasn't to protect these kids; it was to amplify the features that kept them hooked, creating a vicious cycle where anxiety drove more usage, which drove more anxiety, which drove more usage.
They knew the product was harmful. They studied exactly how it was harmful. And then they used that knowledge to make it more addictive.
And yet, despite whistleblowers, despite congressional hearings, despite mounting evidence of harm, we haven't been able to create meaningful regulations for these companies. Why? Because they have too much vested power. They employ armies of lobbyists. They fund think tanks and research institutions. They make strategic political donations. They've become too big to regulate.
When a handful of companies control the platforms where billions of people - including our children - spend their time, and when those companies prioritize engagement and profit over wellbeing, we have a crisis. And when those same companies have accumulated so much political and economic power that they're effectively immune to regulation, we have a system that's fundamentally broken.
The Hiring Power of Big Tech
Big tech companies don't just dominate markets - they dominate talent pools. And this creates a vicious cycle that further entrenches their power while starving the rest of the economy of innovation.
The numbers tell the truth (which you already know): Google, Meta, Amazon, Apple, and Microsoft collectively employ over 1.5 million people globally. But it's not just the quantity - it's the quality. These companies can offer compensation packages that smaller companies and startups simply cannot match. Total compensation for senior engineers at these companies can easily exceed $500,000 per year when you include base salary, bonuses, and stock options.
Brookings analysis shows U.S. tech growth remains heavily concentrated in a small number of dominant hubs, reinforcing winner-take-most talent dynamics. And CSET's "The Race for U.S. Technical Talent" reports that more than 60% of technical workers in Big Tech firms held degrees from "ranked" universities (compared with roughly 20% in the DoD sample they studied). This concentration dynamic leaves startups and smaller companies struggling to compete for top talent.
Unfortunately, much of this talent isn't being used to create innovative new products or solve hard problems. Instead, they're working on incremental improvements to existing products, building internal tools, or - and this is crucial - simply being kept away from competitors.
Thumbnail Image from Youtube Video: https://www.youtube.com/watch?v=h24I2Rrjqmc
Economists call this "defensive hiring" or "talent hoarding." Companies hire brilliant engineers not because they have meaningful work for them, but to prevent competitors from hiring them. It's a rational strategy for the individual company, but it's economically wasteful for society as a whole.
The impact on the broader economy is significant. When the best and brightest are concentrated in a handful of companies, innovation in other sectors suffers. We end up with incredibly sophisticated algorithms for serving ads and keeping people scrolling, but slower progress in areas like healthcare, education, and climate tech where talent is desperately needed but can't compete on compensation.
Big Tech Doesn't Need to Be... That Big
Most big tech companies are bloated beyond any reasonable operational need. And the recent waves of layoffs have proven it.
People blame AI for the layoffs, but it's not AI's fault. It's the fault of the companies that hired so many people in the first place (especially during COVID!). What's happening is a market correction.
In 2022 and 2023, tech companies laid off over 400,000 workers. Meta cut 21,000 jobs. Amazon laid off 27,000. Google cut 12,000. Microsoft eliminated 10,000 positions. And you know what happened to these companies after the layoffs? Their stock prices went up. Their products continued to function. In many cases, employees reported that things actually got better - fewer meetings, less bureaucracy, faster decision-making.
Image from https://www.statista.com/chart/29175/largest-tech-layoffs-since-2020/
So why were all these people hired in the first place?
For many companies, especially unicorn startups, hiring is a signal to investors. Headcount growth is seen as a proxy for company growth. "We're scaling!" they announce, as they hire hundreds of engineers. Never mind that revenue hasn't materialized or that the product-market fit is questionable. The appearance of growth is what matters for the next funding round.
But there's a more insidious reason for bloat: coordination overhead. As companies grow, they need more people just to coordinate the people they already have. You need program managers to coordinate between teams. You need product managers to translate between engineering and business. You need engineering managers to manage the managers. You need directors to manage the managers of managers.
Then there are roles that exist purely because of organizational complexity. Release managers who coordinate deployments across dozens of teams. Developer experience engineers who build tools to help other engineers navigate the company's labyrinthine systems. Technical program managers who spend their days in meetings trying to align different teams' roadmaps.
None of this is the fault of the individuals in these roles - they're doing necessary work. But it's only necessary because the organization has become so large and complex that it can barely function. It's like a snake eating its own tail.
The irony is that many of the most impactful products in tech were built by tiny teams. WhatsApp had 55 employees when it was acquired for $19 billion. Instagram had 13 employees when it was acquired for $1 billion. These weren't just lucky flukes - they demonstrate that with the right focus and tools, small teams can build products that serve billions of users.
The bloat isn't a bug - it's a feature of monopolistic companies that have more money than they know what to do with and need to appear to be "investing in growth" to satisfy shareholders.
Big Tech No Longer Solves a Specific Problem
When was the last time you could describe what a big tech company does in a single sentence? It's become nearly impossible.
Take Grab, the Southeast Asian super-app and Singapore's precious gem (which ironically, was built by Malaysians who chanced upon Uber and decided to build a Southeast Asian version... btw no hate to Malaysians I'm basically part-Malaysian too! Just pointing another funny fact). It started as a ride-hailing service - a clear, focused problem. But now? It's ride-hailing, food delivery, grocery delivery, package delivery, digital payments, financial services, insurance, hotel bookings, and more. Open the app and you're confronted with a dizzying array of options that have nothing to do with getting from point A to point B.
Image from Or look at Meta. Facebook started as a way to connect with college classmates. Now it's social networking, messaging, photo sharing, video streaming, virtual reality, augmented reality, artificial intelligence research, cryptocurrency (remember I mentioned Libra?), e-commerce, and whatever the metaverse is supposed to be. Mark Zuckerberg has spent over $36 billion on VR and metaverse initiatives that have yet to find product-market fit, all while the core social media products stagnate.
Google is a search engine, an email provider, a cloud computing platform, a smartphone manufacturer, a self-driving car company, an AI research lab, a video streaming platform, a productivity suite, a smart home device maker, and a health tech company. Amazon sells books - oh wait, no, it sells everything, and also runs half the internet's infrastructure, makes movies and TV shows, owns a grocery chain, manufactures smart speakers, and is getting into healthcare.
This sprawl isn't efficient - it's the opposite. When a company tries to do everything, it does nothing particularly well. Resources get spread thin. Focus is lost. Internal politics determine which projects get funding rather than market need or innovation potential.
More importantly, this "do everything" approach is only possible because these companies have monopoly profits from their core businesses that they can use to subsidize expansion into other markets. They can afford to lose money for years in new ventures because they're printing money in their monopoly markets. This makes it nearly impossible for focused startups to compete.
A startup that wants to build a better food delivery service has to compete with Grab, which can subsidize its food delivery with profits from ride-hailing. A company building VR hardware has to compete with Meta, which can lose billions on VR while still making tens of billions from advertising.
The result is less innovation, less competition, and worse products for consumers. We'd be better off with ten focused companies each solving one problem really well than one company trying to solve ten problems poorly.
So What Does This All Mean for The Future of Tech?
I think this signals a move towards a breaking down of big tech monopolies, and especially with the aid of AI, for more software engineers to build smaller, leaner companies. In my next article, "If AI Means Coders Are Now Architects, Do We Need That Many Architects?", I explain this vision - so be sure to check it out!
ragTech is a podcast by Natasha Ann Lum, Saloni Kaur, and Victoria Lo where real people talk about real life in tech. Our mission is to simplify technology and make it accessible to everyone. We believe that tech shouldn't be intimidating, it should be fun, engaging, and easy to understand!
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