Thursday, June 25, 2020

The Coming Demise of American Big Tech? - By Robert Weissberg

Future historians with an eye for inflection points may well focus on the Wall Street Journal of June 12, 2020. A page 1 banner reads, “Companies Pledge Actions to Promote Racial Justice” and recounts how in response to the George Floyd killing, Apple and Google are pledging millions to promote racial inclusion. Less than a week later, Google was more specific: allocating $175 million to sharply increase the number of black Google executives (30% by 2025), upping the firm’s anti-racism efforts, $100 million for black owned start-ups, $15 million for improved training for black job applicants and $3 million to schools to close gaps in computer education and STEM fields.      
If Wall Street Journal readers flipped it over to the last page of Section A, they would have seen the banner, “China Pours Funds Into Tech Push.” The story told of China’s trillion-dollar investments in computers to overtake the U.S. in cutting-edge technology. Now more than a dozen Chinese cities will launch projects ($935 billion), the Ministry of Industry and Information Technology’s five-year program will invest $14 trillion in artificial intelligence, data projects, and communications. Private Chinese firms, notably Alibaba and Tencent, are similarly upping their high-tech investment.
These figures of course tell only a partial story -- American firms are only putting millions into “woke” enterprises, but billions will continue to be invested in high-tech to match Chinese efforts. Also excluded are U.S. government-funded agencies such as DARPA and, conceivably, U.S. brainpower toe-to-toe will outperform the Chinese despite their lavish spending.
Nevertheless, it is certainly fair to ask why these U.S. tech companies embrace million-dollar racial justice schemes when every similar past diversity effort has failed? Have Google, Apple, Oracle and others, unlike their Chinese rivals, recently discovered that a diverse workforce builds a better supercomputer? Might the Chinese Communist Party now send spies to infiltrate these Tech giants to acquire the secrets of diversity as they now steal advanced chip designs?  Most important, does this divergence in priorities harbinger a slow decline in U.S. technological preeminence? 
Silicon Valley’s diversity push began in 2014 when Jesse Jackson set up shop there along with other more community-based groups such as Hidden Genius,Kapor Center, and Greenlining coalition.  Jackson and his allies enjoyed initial success -- Intel, for example pledged $300 million to help boost workforce inclusiveness while Apple donated $40 million to historical black college and universities. Google sent its engineers to black colleges to teach introductory computer science and help graduates find technology jobs. It also created a one-year residency at the firm for students at HBCU’s. In 2017 Apple announced that it number of “under-represented minorities” had increased from 19% of its workforce to 23% and, of the utmost importance, 50% of its new hires were from these underrepresented groups.   
Oddly, the underlying premise of this pressured diversity contradicts the dog-eat-dog, innovate or die mentality dominating Silicon Valley. With billions at stake, and hungry startup rivals galore, everybody seeks an edge, and overlooking any advantage is suicide. Intel, for example, heavily invests in chip development in Israel. Successful firms routinely recruit talent from overseas. Surely if pools of talented minority software engineers existed, firms would uncover them with being pressured by social justice activists.  
Unfortunately for diversity devotees, however, a review of hiring in Wiredreveals that such hidden talent is nearly nonexistent. In the all-important field of technical workers such as coders, the share of black and Latinx workers rose less than one percent since 2014 when the big bucks diversity push began (the proportion of women did, however, rise substantially). Yes, tech executives can tout progress, but this is deceptive since the burgeoning number of hires overall post-2014 means that the blacks and Hispanics workforce must be sharply expanded just to keep proportions steady (Facebook during this period quadrupled its workforce).   
Would employing workers from historically under-represented groups give U.S. firms an edge when competing against Chinese rivals? Alas, claims regarding the diversity benefit seem over-heated rhetoric. One data-free claim, for example, asserts that upping diversity would add an additional $400 billion in revenue to the tech industry. As these advocates put it,  “…more diverse companies, we believe, are better able to win top talent and improve their customer orientation, employee satisfaction, and decision making, and all that leads to a virtuous cycle of increasing returns (italics added for emphasis).” Yes, profitable companies may relish diversity but equally plausible is that ample profits versus being almost broke permits the luxury of diversity while polishing corporate images.  
Another advocate claims that “More than ever, companies mired in culturally myopic ideas are finding it more difficult to get ahead in a society that has embraced different backgrounds and lifestyles.” A further claim is that many potential employees cherish diversity and thus want to work in a diverse environment which, in turn, is a supposed recruitment advantage.  Again, no hard evidence, and such claims would counsel company directors to fire current Tech executives for leaving billions on the table for ignoring diversity.
If the past foretells the future, merit is in trouble over the long haul. Today’s pressures are immense, and merit grows increasingly unfashionable. Diversity activists are attending stockholder meetings and harangue everybody with horror stories about working sans diversity. One female Google engineer explained how the absence of diversity and inclusion initiatives “…left many of us feeling unsafe and unable to do our work.” She further added, “The chilling effect of harassment and doxxing has impaired productivity and company culture.” Keep in mind that Silicon Valley is in California, home of rampant ill-advised social engineering so compulsory diversity may arrive soon. Predictably, discrimination lawsuits have been filed by terminated Google employees who were queer or transgendered, a tactic whose likely real purpose is to prod Google into hiring by gender/sex quota to pre-empt future diversity discrimination.
While it may seem impossible to imagine the demise of Google, Apple and other contemporary deep-pocket high-tech firms, the “creative destruction” of capitalism is relentless. Websites recount the demise of Alta Vista, Netscape, Infoseek, Webcrawler, and Zune. Not even Microsoft has made Bing a success or could save Explorer, and Google itself bombed with Nexus QAOL was once a multi-billion-dollar firm with a near web and e-mail monopoly. No firm can survive endless bad decision-making, and hiring people by skin color, not ability, surely invites failure.  
The university is the parallel -- diversity hiring began small but as additional diversicrats were hired and handsomely rewarded, racial bean counting exploded. Traditional merit became disparaged as “white male standards” whose devious purpose is to exclude historically under-represented groups. As today’s universities drop the SAT in admissions, Google’s “bias” against communities of color may eventually be eliminated. If so, white and Asian males will stop even applying for Big Tech jobs just as white males currently shun academic positions.  
If the diversity mania goes unchallenged, American Big Tech may slowly lose its edge as consumers gravitate to better software and communications gear built in China though engineered by Americans unable to advance up the Google or Apple career ladder. When you consider the stakes here, one can only suspect that China is secretly funding the diversity push.