Briefing

International Monetary Fund (IMF) warns that tech giants stifle innovation and threaten stability

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A small number of companies in advanced economies are responsible for most of the increase in corporate market power—measured by price markups—since 2000, according to the organization’s new World Economic Outlook. Consequences could include falling investment, less innovation and a smaller share of revenue for workers. (The Guardian)

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Talking point: The IMF doesn’t name specific companies, but said the firms with the biggest hikes were more likely to invest in intangible assets like patents and software; industries that use digital technologies also had higher markups—read: Big Tech. While the IMF isn’t the first to identify this winner-takes-most trend and worry about its impact, it’s an important addition to the debate. Jim Balsillie, the former co-CEO of Research in Motion (now BlackBerry), has called for the organization to set global data use standards. International cooperation—potentially via multilateral institutions like the IMF—is necessary to prevent tech giants from “domain shopping,” by, for example, routing digital ad revenue through Ireland to avoid taxes or holding drug patents on a Native American reserve to keep them out of court.