Is innovation economically democratic?

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Article from Exame magazine, by Pyr Marcondes, Senior Partner at Pipeline Capital Tech. Read in full here.

No, unfortunately, innovation is not democratic. As well as the technology that often promotes it. In a world accelerated by technological innovation, the likelihood is that the concentration of economic power will accelerate, not the other way around.

There was a time when the digital world was considered a possible great solution for reducing the economic gap between the vulnerable layers of societies and those who hold and concentrate economic power. But these proved to be naive times, in which despite the theory being rigorously right both from a conceptual and technical point of view, it was not exactly the principles of equality and the search for inclusion that became the rule. On the contrary: innovation is today, like so many other forms of control, a factor that deepens concentration and domination.

Elon Musk was in Brazil and one of his projects for the country is to bring internet to populations in need of this item that is now in high need, living in places far from the current connection network that the country can offer. Regardless of your opinion of Musk – I have multiple opinions of Musk as well – objectively, this is undoubtedly a form of democratization of resources that innovation and technology can promote.

But the downside – or upside, depending on which side you’re on – is that Musk will become even more of a billionaire and the socioeconomic impact that he will, in fact, be promoting, does not significantly change the economy’s balance pointer. Let Musk’s internet come. Connected populations will be more likely to survive than disconnected ones. Fact. But projects like this only scratch the surface. And while they may be welcome, they have not altered the structure of the prevailing economic order.

In a revealing report, the latest issue of the MIT Technology Review magazine alerts us that the same happens with startups internationally, as they are now considered one of the most powerful engines of innovation in the global economy. Its disruptive power is overwhelming and merciless. The little ones facing the big ones.

But equally overwhelming and merciless is the economic power of the large companies that end up acquiring them and benefiting, growing even more, from the advances promoted by them.

That is, innovation is born at the edges of societies and economies, but in a short time it is absorbed by the concentrating center of capital, the large corporations.

The title of the magazine article is “Big technology is slowing innovation”. For the reasons I described above.

The trend, points out the report, is that the pace of innovative advances promoted by startups tends to cool down and not increase.

It is a bleak prediction, but unfortunately with a strong potential to come true. Startups could mean a swing in the pendulum of economic concentration. Only not.

For economies, if confirmed, this would be an event with a high negative impact, because the dynamic we are in is hungry for innovation to support the advances and differentiation of companies and economies. Of societies in general, actually. And dealing with an adverse scenario of this type can be highly damaging even for large corporations.

Is there a way to change all this? Of course. It involves changing the structure of global economic concentration. Which can indeed be reformulated by public policies and international decision-making and management bodies, which could create norms and rules for this democratization of innovation to occur. By decree, with due punishments affixed.

Is it easy for this to happen? No. In truth, neither easy nor likely.

Article from Exame magazine, by Pyr Marcondes, Senior Partner at Pipeline Capital Tech. Read in full here.

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