In the West, there is a lot of chatter about “a new Cold War,” with the US and China battling it out for global technological supremacy. Yet, a close look at the tech ecosystem shows that US corporations are overwhelmingly dominant in the global economy.
China, after decades of high growth, generates around 17 percent of global GDP and is predicted to overtake the US by 2028, feeding into claims that American empire is on the decline (a narrative that was previously popular with the rise of Japan). When measuring the Chinese economy by purchasing power parity, it is already larger than the US. However, aseconomist Sean Starrs points out, this wrongly treats states as self-contained units, “interacting as billiard balls on a table.” In reality, Starrs contends, American economic dominance “hasn’t declined, it globalized.” This is particularly true when looking at Big Tech.
In the post-WWII period, corporate production was spread across transnational production networks. For instance, in the 1990s, companies like Apple began outsourcing electronics manufacturing from the US to China and Taiwan, exploitingsweatshop workers employed by companies like Foxconn. US tech transnationals often design the IP for, say, high-performance router switches (e.g. Cisco) while outsourcing manufacturing capacity to hardware manufacturers in the South.
Starrs profiled the world’s top 2,000 publicly traded companies, as ranked by Forbes Global 2000, and organized them according to 25 sectors, showing the dominance of US transnationals. As of 2013, they dominated in terms of profit shares in 18 of the top 25 sectors. In his forthcoming book American Power Globalized: Rethinking National Power in the Age of Globalization, Starrs shows that the US remains dominant. For IT Software & Services, US profit share is 76 percent versus China’s 10 percent; for Technology Hardware & Equipment, it is 63 percent for the US versus 6 percent for China, and for Electronics, it is 43 and 10 percent, respectively. Other countries, such as South Korea, Japan and Taiwan, often fare better than China in these categories as well.
Portraying the US and China as equal contenders in the battle for global tech supremacy, as is often done, is therefore highly misleading. For example, a 2019 United Nations “Digital Economy” report states that: “Geography of the digital economy is highly concentrated in two countries” — the United States and China. But the report not only ignores factors identified by authors like Starrs it also fails to account for the fact that most of China’s tech industry is dominant insideChina, save a handful of major products and services, such as 5G (Huawei), CCTV cameras (Hikvision, Dahua), and social media (TikTok), which also hold large market shares abroad. China also has substantial investments in some foreign tech firms, but this hardly suggests a genuine threat to the dominance of the US, which has a much larger share of foreign investments as well.
In reality, the US is the supreme tech empire. Outside of US and Chinese borders, the US leads in the categories of search engines (Google); web browsers (Google Chrome, Apple Safari); smartphone and tablet operating systems (Google Android, Apple iOS); desktop and laptop operating systems (Microsoft Windows, macOS); office software (Microsoft Office, Google G Suite, Apple iWork); cloud infrastructure and services (Amazon, Microsoft, Google, IBM); social networking platforms (Facebook, Twitter); transportation (Uber, Lyft); business networking (Microsoft LinkedIn); streaming entertainment (Google YouTube, Netflix, Hulu), and online advertising (Google, Facebook) — among others.
The upshot is, whether you are an individual or a business, if you are using a computer, American companies benefit the most. They own the digital ecosystem.