PremiumAs one approaches middle age, the mind turns increasingly philosophical and starts questioning tenets once held as immutable truths. With this column turning 51, the same phenomenon has forced it to question a basic canon: Is what we call and celebrate as ‘tech’, really tech? This thought was triggered by a famous story about an eminent data scientist Jeffrey Hammerbacher, an early Facebook employee. In an interview with BusinessWeek, he mused: “The best minds of my generation are thinking about how to make people click ads..." He then left the ad-clicking business to Facebook and went on to build Cloudera, an enterprise data platform company.
This thought was reinforced by a recent Substack post (bit.ly/37nuBAx) by Bloomberg columnist Noah Smith, which offered an intriguing reason why China seems to be demolishing its ‘tech’ industry. It started with Alibaba founder Jack Ma vanishing from public sight after the $37 billion listing of his Ant Group got sabotaged. Then came the DiDi episode, when ‘China’s Uber’ was banned from onboarding new customers a couple of days after its sterling public offer on grounds of “national security". Other Chinese tech majors like Bytedance and Baidu are also under similar regulatory pressure and are reported to be undergoing what is officially called “rectification".
A few experts believe that this is like the antitrust pressures being put on Google, Apple, Facebook, and Amazon in the West. Others believe that this is because tech majors have become too powerful and arrogant, and so China’s Communist Party wants to show them who is boss. The Alibaba crackdown, for instance, came days after Jack Ma publicly disparaged Chinese public-sector banks for operating with a “pawn-shop mentality". The clampdown of Big Tech in China seems to be systemically different than in the US and Europe. Beijing seems to be attacking the entire tech sector. It is not just giants under the hammer, even venture funding seems to have shrunk. For decades, China assiduously built up its tech sector and touted an industrial and internet model that was different from the West’s. Arguably, it was a resounding success, with China creating its own world-class tech success stories. Then why is it strangling the golden goose it had cradled?
China, Smith says, does not consider what we define typically as ‘tech’ to be tech. It may have its own definition. His argument is that China is not going after all tech companies—for example, telecom giant Huawei is solidly backed by Beijing. It is throwing gobs of money at setting up a domestic semiconductor industry and its heavy spending on artificial intelligence continues unabated. It is the consumer-facing, social networking and payments industries that seem to be in the cross-hairs, not the hardware or electronics or deep-tech players.
Smith argues that perhaps the West is too enamoured by the consumer-facing Facebooks and Googles of the world, since they are insanely profitable, with their low overheads, powerful network effects and the proprietary algorithms that spin gold out of ‘free’ data. The West is intrinsically capitalist and equates profit with value, and, as it’s good at such businesses, this is ‘tech’ for it—rather than, say, a Cisco or Honeywell, which make tangible hardware but not piles of cash. Maybe the Chinese see things differently; they are interested in a ‘hard’ tech sector that makes chips, engines, fuels and aircraft. Things which add real economic value, rather than exploit the first-mover advantage and “squat on unproductive digital land", deriving profits “more from rents... than real value added". The Chinese want tech to win wars, as per Smith, not just to ease life with everything at one’s fingertips.
As Gregg Satel writes: “It’s a strange conceit of digital denizens that their businesses are something nobler than other industries. While it is true that technology can do some wonderful things, if the aim of Silicon Valley entrepreneurs was truly to change the world, why wouldn’t they apply their formidable talents to something like curing cancer or feeding the hungry?" Even in the West, there are some honourable exceptions: Elon Musk is exploring space travel, electric transportation, alternative energy, brain-machine communication and urban commutes, while most of his contemporaries focus on ad-clicks. Scientists have saved the world by blitzing through mRNA and other vaccines. But it is perhaps the Chinese, with their Confucian 100-year vision, who seem to be turbo-charging this move back towards real ‘tech’. And, to create that, they seem ready to destroy the ‘pretender’ that exists today.
Jaspreet Bindra is the author of ‘The Tech Whisperer’, and founder of Digital Matters
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