Michael Malone's new book, "The Intel Trinity : How Robert Noyce, Gordon Moore, and Andy Grove Built the World's Most Important Company" (HarperBusiness), will be published in mid-July and today in an op-ed in The Wall Street Journal, he writes: "For more than a half-century, big technology companies have led the way in inventing revolutionary products and services, from calculators to smartphones. Startups, meanwhile, have built upon those creations with innovations like peripheral devices and software applications. This was as true for the IBM computer as it was for the Apple iPhone. But something fundamental has shifted in Silicon Valley."
Intel, the chip giant, says that the invention of the microprocessor, which operates as the brains inside electronic devices, was monumental, but Malone's book points to how these three men created things that forever changed the world and inspired innovation at Intel, which Malone calls “the world’s most important company.”
In 2012 in a paper [pdf] that I presented at an economics conference, I wrote:
Michael Malone sees Facebook's acquisition of the WhatsApp mobile messaging startup last February as an "emblematic event."
He writes: "It may prove a brilliant strategy. But it also means that Facebook, one of the most innovative companies of the past decade, now depends on purchasing the inventiveness of others. The company isn't alone."
We at Finfacts have also reported on this trend:
Malone says during Steve Jobs's tenure at Apple, the company produced three landmark products - - the iPod, iPhone and iPad - - in little more than eight years. Now, after four years, customers are growing impatient waiting for the rumoured iWatch, which, if real, won't appear until at least autumn.
Michael Malone says the acquisition strategy is also seen in the big pharma and biotech.
Our recent piece on tax inversions covers this issue:
Oracle founded in 1977, has become the world's biggest business software company, mainly through acquisition.
On why are large tech companies losing the ability to innovate, Malone cites entrepreneur and author Salim Ismail who has studied the new generation of "exponential corporations," enterprises that grow 10 times faster than the average rate. He believes that established companies simply aren't structured for this kind of speed. So their only choice is to buy those companies that can still innovate rapidly.
Malone concludes his op-ed piece: "Tech appears to be evolving into a different kind of field: one that is, paradoxically, more static at the top but also more dependent on entrepreneurship than ever before."
For Ireland, innovation and the application of technology are important and the reason why we at Finfacts have repeatedly questioned the delusions of Micheál Martin, enterprise minister, in 2006 who aspired to create a "world-class knowledge economy" by 2013 or Richard Bruton, enterprise minister, who said in 2012 that Ireland should aim to create the next Microsoft or Google (in a country with a tiny domestic market - armchair experts often ignore the importance of the learning experience in a familiar market before venturing overseas), is that a young Irish venture capital-backed tech firm with serious potential, would inevitably be acquired internationally before it could scale up in Ireland.
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