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Expansion of the technology giants may be bad news for the economy

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The technological giants such as Facebook and Amazon are at the top in terms of market capitalization. This is good for profits, but according to a new study, there is a risk that productivity and growth potential will be affected in long-term.
According to the economist of the French Central Bank, Sophie Guilloux-Nefussi, the market share of the eight largest US companies has grown by more than 60% within the sector in which they operate for the period 2002-2012.
As a result, the profits continue to grow, but the upward trend is not sustained by investment and wages. Reducing the contribution of companies to the income of the population may deepen the polarization of society and less investment to reduce the growth potential of the economy in the coming years.
Moreover, the barriers to entry of new entrepreneurs become more and more visible, as evidenced by the sharp decline in the number of start-ups. The reasons for the success of larger companies are more than clear. Their rise can be due to the fact that they are really profitable or that they take the fruits of technological progress.
Other studies suggest more pessimistic scenarios and re-focus market concentration on the fact that competition has become more and more difficult, as evidenced by the growth in profits and the decline in investment.
The last year the technology industry was shaken by loss of confidence. Above all, there is concern about the increase in automation and the continued loss of jobs.
The big tech companies are walking on thin ice, and 2018 will be the year in which giants in this area will have to take a close look at all these issues or risk losing users. There are two possible ways from now on. First of all, technology companies need to trigger quickly and address the issues of loss of confidence by self-regulation. The second option is for governments to engage in regulation.