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Why America Doesn't Need More Tech Giants Like Apple 631

Hugh Pickens writes "Optimists says that if only America produced more companies like Apple and Amazon and Google and Facebook, the country's economic problems would be fixed — America could retrain its vast, idle construction-and-manufacturing workforce, and our unemployment and inequality problems would be solved. But Apple's $1 billion new data center in North Carolina has been a disappointing development for many residents, who can't comprehend how expensive facilities stretching across hundreds of acres can create only 50 new jobs, especially after thousands of positions in the region have been lost to cheaper foreign competition. In fact, Apple actually exemplifies some of the reasons why the U.S. has such huge unemployment and inequality problems: 'Digital' businesses like Apple employ far fewer people than traditional manufacturing businesses, Apple's 60,000+ jobs are not just in the U.S. — they're spread around the world. Companies like Apple 'create amazing products and vast shareholder wealth, but they don't spread this wealth around as much as earlier industrial giants did,' writes Henry Blodget. 'So, yes, we should celebrate the success of Apple, Google, Facebook, and Amazon. But we shouldn't delude ourselves into thinking they're going to solve our unemployment or inequality problems.'"
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Why America Doesn't Need More Tech Giants Like Apple

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  • Need (Score:5, Insightful)

    by masternerdguy ( 2468142 ) on Wednesday November 30, 2011 @09:15AM (#38213008)
    What we need is small, independent, companies competing directly in the same way Linux distros compete with each other. That will encourage innovation.
    • Re:Need (Score:5, Funny)

      by vlm ( 69642 ) on Wednesday November 30, 2011 @09:27AM (#38213108)

      What we need is small, independent, companies competing directly in the same way Linux distros compete with each other.

      Aggressive flamewars on slashdot and mailing lists? I'm not seeing that work.

    • Re:Need (Score:5, Insightful)

      by dkleinsc ( 563838 ) on Wednesday November 30, 2011 @09:29AM (#38213120) Homepage

      And, it should be pointed out, we have that - there are thousands of small tech businesses in all sorts of fields.

      What happens, of course, is that some of them start building up successes, and then the vulture capitalists get involved, and then the business press goes gaga over them, and then there's a headline IPO, and then they aren't small tech businesses anymore. That's what happened to Microsoft, to Apple, to Google, and to Facebook. And if you are the founder of one of these thousands of small tech businesses, and you had the opportunity to take this kind of ride and make millions, would you really not take it?

      • Re:Need (Score:5, Insightful)

        by lightknight ( 213164 ) on Wednesday November 30, 2011 @09:57AM (#38213386) Homepage

        Indeed. It's something of an oddity these days that there are so many tech companies that, instead of growing larger, are instead being bought out. That is to say, the game now is to build a company that gets bought out in (say) 5 years, not one that will last 200 years.

        • Re:Need (Score:4, Interesting)

          by tthomas48 ( 180798 ) on Wednesday November 30, 2011 @11:48AM (#38214824) Homepage

          It's because the stock market is so pathetic. Economic incentive is to get bought out rather than tempt fate on a stock market that people have lost faith is in any way valuing things correctly. If the stock market were to somehow regain the public trust I bet we'd see far more IPOs and far less buyouts.

          • Re:Need (Score:4, Interesting)

            by Anthony Mouse ( 1927662 ) on Wednesday November 30, 2011 @02:29PM (#38216926)

            It's not the stock market. It's the legal system. Especially the patent system. If you're the little guy and you start to challenge the big guy, you get a nastygram to the effect of "this is a list of our patents that you're infringing. You can take a license for ONE BILLION DOLLARS, or you could just sell is your company and retire." Naturally the little guy doesn't have to sell his company to the bigger company. There is another option: He can sell his company to a different bigger company, which has sufficient defensive patents to tell the first bigger company to go to hell. Which is why the little guy can get good money -- the big guys will bid against each other for which one buys him out. There just isn't any option left of "remain an independent company."

      • Re:Need (Score:5, Insightful)

        by JoeMerchant ( 803320 ) on Wednesday November 30, 2011 @10:06AM (#38213494)

        It's another form of the lottery, pro-sports, famous actor/actress syndrome. Everybody sees it, everybody wants it, reality is that only a very very few can actually get it - if everybody got it, it wouldn't be desirable anymore.

        Thousands of small businesses, or small business units of larger corporations, toil away toward the brass ring while only a few ever even come close to reaching it.

        Just like the OWS 99% problem, the brass rings need to be more numerous and less shiny. The serfs (working poor, small businesses, etc.) are going to stop trying for them when it becomes apparent that they'll die before they ever get there.

        • by Zebedeu ( 739988 )

          It's another form of the lottery, pro-sports, famous actor/actress syndrome.

          Difference being that these small companies actually produce something worthwhile while trying to strike gold.
          And for those that do get lucky, they normally deserve their new found riches much more than a girl with big tits who can emote on camera.

    • by A12m0v ( 1315511 )

      Too much infighting and duplicated effort?

    • Re: (Score:3, Insightful)

      by Targon ( 17348 )

      What we need is for the entire patent system to be thrown out since only the big companies have enough patents to be ALLOWED to innovate without fear of a lawsuit crushing their company out of existence. That is the REAL problem, where if you come up with an idea for a $5 product that would sell millions of units, yet you need to pay $50 per unit worth of legal fees to protect yourself from lawsuits.

      Apple is a PERFECT example of this, where they will start lawsuits over their so-called intellectual proper

  • Why won't APPLE build 100,000 new data centers ?
    • Re: (Score:3, Funny)

      by Hognoxious ( 631665 )

      There's a limit to how much gay porn you need. Even for Apple.

    • One data center per town* in the US!

      *A town must have at least 50 employable residents to qualify for an Apple Data Center.

  • by cashman73 ( 855518 ) on Wednesday November 30, 2011 @09:25AM (#38213092) Journal
    It is interesting how many people seem to see big businesses and major corporations. They have huge advertising budgets, and thanks to that, you see their logo EVERYWHERE. And they do employ a lot of people, at home and abroad, and support the development of great products (be they actual tangible products like the iPhone or Kindle, or more of a service, like Facebook. That being said, the backbone of any modern economy still lies in small businesses. And the big ones do support the little guys. Look at Apple's App Store, for example. Of the thousands of apps on there, how many of those apps were created and marketed by a small company of less than 100-200 people (or even how many apps were put out by a one-man-shop)? Remember also, that many of these big corporate giants started as small businesses -- Apple and HP both started in a garage in silicon valley.
    • by jbolden ( 176878 ) on Wednesday November 30, 2011 @09:30AM (#38213130) Homepage

      Most small businesses are support business for large business. It is absolutely the case in the US that their is mobility between businesses, small businesses grow and large business often shrink. However this can take quite a bit of time and really doesn't change the fact that big business is the ultimate engine.

    • by Anonymous Coward on Wednesday November 30, 2011 @09:45AM (#38213262)

      Apple and HP both started in a garage in silicon valley.

      And HP has recently announced they're moving back to their garage.

    • by plurgid ( 943247 ) on Wednesday November 30, 2011 @11:51AM (#38214856)

      I call hogwash on this meme of "small business is the backbone of America".
      Granted, I don't get out as much as I used to, but I have been to quite a few parts of America, and that simply hasn't been the case in any of them.

      I live in the deep south. I have to drive through numerous small/medium sized semi-rural or commuter type towns to get anywhere.
      Here's what you see almost every time:

      1) The nicest building in town: The Jail
      My guess is that's probably either a side effect of 9/11 paranoia funding, or privatization + drug war funding. But this is the case in a *shockingly* large number of towns I've driven through lately. And it is super depressing.

      2) the second nicest building in town: The Hospital
      presuming they have one. Otherwise ... move on to #3

      3) Wal-Mart (or sometimes Target, but mostly Wal-Mart)
      most of the time it's the "supercenter", and that means it's the town's grocery store, hardware store, and auto-repair shop as well.

      4) the court house, the police station
      the third or fourth nicest place in town, depending on if they have a hospital. Almost always with some sort of super nice show vehicle or parked in the parking lot. One time I saw a tricked out hearse with the "DARE" logo on it once. I suppose this crap keeps the kids off drugs. Or something. Sometimes you see some ridiculous armor outfitted hum-v or what have you. One supposes for meth raids.

      5) The abondoned Factory / Textile Mill / Office Park
      Almost every one of these small towns has a few decaying carcasses of their former glory. Also super depressing.

      And that's it. That's what's happening in small-town America. Believe it.

      The small business that you see are BS "gift stores" that spring up in the abandoned downtown areas (where the trains used to pull in back in the day usually) probably they're just tax write offs for rich housewives, because it's literally impossible to imagine people living in these crapholes lining up to buy $30 potpourri stuffed decorative chickens and shit. But then, maybe that jail work really pays off, and they do support themselves.

      Either way, that shit is not the backbone of America.
      And good luck starting a business in your garage and growing like an Apple or an HP today.
      It's impossible, because the victors have written the rules, and you'll find yourself under a completely different tax system than the large corporations.

      Some fundamentals have gotta change before things get better, and it's not going to fix itself.

  • by mozumder ( 178398 ) on Wednesday November 30, 2011 @09:27AM (#38213106)

    Those 50 jobs aren't the only benefits that came out of the data center.

    If it costs $1billion to build that data center, then that's $1billion added to the economy, affecting a lot more people than 50 direct employees.

    (How many people did it take to actually construct the place? to handle permits for construction? To deliver food for people that handle permits? To handle mail to deliver food to the people that handle permits for construction, etc..)

    Jobs created don't provide the overall picture of an economic effect. Actual spending does.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Short term vs Long term.... Construction of the Data center was a short term gain in employment for the region. In the long term, only 50 jobs were added, the point being, a manufacturing facility would employ more people for a longer time. A much smaller manufacturing facility, with a much smaller land and resource footprint, say 1/4 the total area, employing 100 employees, would have been a much bigger LONG TERM gain for the area.

    • by Targon ( 17348 )

      The big problem is that you are talking about two very different things. You have the need for long-term jobs, and you have the need for short-term/temp jobs. Construction is a dangerous area to talk about, because for those who have a career in the construction industry, you need to have new contracts that come in so you have work AFTER each project is complete. This means you need to have a sustained environment of growth, or at least building(tearing down and then re-building would work too). So

    • by vadim_t ( 324782 )

      You're looking at the wrong thing.

      Yeah, 1 billion might be a big number. But that number is much smaller than the total that would result from 1000
        small datacenters that would provide the same capacity. Building a huge datacenter saves money, and needs fewer people to run. That's why they build things like that in the first place.

    • by hjf ( 703092 )

      Now take all you just said and multiply it for, say, 500 people of a car factory. A value-added product, that transforms raw materials into a car. The $1B data center doesn't take any raw materials, its sole purpose is to deliver Angry Birds to your iPhone.

      But hey! If it makes you better to think that a huge capital investment of $1B is better than probably $1B operating cost over 3 years for a factory that actually sells products for export (and has an expected life of 10-20 years until a complete overhaul

      • So what do you propose we do about this? The only idea I can think of is to artificially make our economy less efficient- similar to Japan. In Japan, there are many regulations and practices which add jobs, but are inefficient.

        For example- in Japan many (most?) private homes are demolished after 20-30 years [] and rebuilt on the same spot. Certainly a boon to the construction industry, but not very efficient and very costly for the homeowner. There are similar practices in Engineering and Industry- pow
    • from the mundane items like sewage and garbage, maintenance of roads to and from, proving electrical power, educating the children if any of the plant's workers, to providing police and fire protection.

      It might be only fifty people in the facility but the support mechanism to allow such a vast process does involve hundreds if not more going forward.

  • 50 jobs (Score:4, Insightful)

    by catmistake ( 814204 ) on Wednesday November 30, 2011 @09:29AM (#38213122) Journal

    who can't comprehend how expensive facilities stretching across hundreds of acres can create only 50 new jobs

    Yup! Its amazing that the whole project was actually completed with only 50 local people... who now have posh jobs running the place. Actually, it would have taken far less people, but curious onlookers kept getting too close to the packed ACME Instant Data Center (tm), so Apple had to hire 49 more people to make sure the crowd stood back while a single drop of water was added to the ACME package and it expanded instantly into the glorious data center that stands there today.

    • who can't comprehend how expensive facilities stretching across hundreds of acres can create only 50 new jobs

      Yup! Its amazing that the whole project was actually completed with only 50 local people... who now have posh jobs running the place. Actually, it would have taken far less people, but curious onlookers kept getting too close to the packed ACME Instant Data Center (tm), so Apple had to hire 49 more people to make sure the crowd stood back while a single drop of water was added to the ACME package and it expanded instantly into the glorious data center that stands there today.

      Yup, and now that the $1B construction job is done, do we just ship the construction workers off to "somewhere else"?

      • Re: (Score:3, Informative)

        by Anonymous Coward

        Yup, and now that the $1B construction job is done, do we just ship the construction workers off to "somewhere else"?

        You obviously have never worked in the construction trades. They don't just go down to Home Depot and pick up 200 guys from the parking lot to build a complex like this. Nor do they haul a trailer on site, put up a sign saying NOW HIRING, and wait for locals to show up with hammers and work boots. A job like this will be contracted out a large construction company, in this case Holder Construction. They then subcontract to large specialist companies for electrical, plumbing, concrete, ironwork, etc. Those s

      • Re:50 jobs (Score:5, Informative)

        by mcgrew ( 92797 ) * on Wednesday November 30, 2011 @11:43AM (#38214770) Homepage Journal

        Yup, and now that the $1B construction job is done, do we just ship the construction workers off to "somewhere else"?

        My dad is a retired lineman, and he spent half his career doing electrical construction. Yes, shipping construction workers somewhere else is exactly how it's done. I didn't see much of my dad as a teeneger when he was tramping around the country building towers and stringing cable.

  • by imamac ( 1083405 ) on Wednesday November 30, 2011 @09:33AM (#38213166)
    Seriously? Buy stock. Wealth spreads to owners. It's that simple.
    • That only works when you have the money to buy stock with, which implies a job and enough disposable income to do so.
    • Re: (Score:3, Insightful)

      How much stock do you have to own before it generates enough revenue to actually live on (never mind getting rich on)?
      What are the currently unemployed and / or in debt going to buy that stock with?
      How many companies / governments with excellent ratings have tanked, taking the investor's money with them?
      How much of that investment then goes towards exorbitant executive pay?

      Most people don't want to gamble on making a living. They want to work and make a living.

  • by Gr33nJ3ll0 ( 1367543 ) on Wednesday November 30, 2011 @09:34AM (#38213172)
    Even the "Traditional Manufacturing Businesses" aren't employing as many people as before. It all comes down to automation. If you do something routine, simple, and repetitive, you can and will be replaced by a machine.
  • by pesho ( 843750 ) on Wednesday November 30, 2011 @09:34AM (#38213178)
    All the talk of how manufacturing will create jobs is just that, talk. In case you haven't noticed modern day manufacturing is automated to a very high degree and requires a lot fewer people to do the job. Robots kill jobs not only in manufacturing, but in pretty much every other employment field. Even scientific research is affected heavily by this and requires fewer people to do the same job. In one week I can do experiments that 5 years ago would have taken 10 people a full year to perform. With such throughput it isn't necessary even to formulate a hypothesis. You just test every possible variation and let the data speak for itself. Machines are more consistent than people, don't get tired, if the make mistakes the mistakes are systematic and easy to troubleshoot. Oh and recently even advanced robots have become very affordable (way cheaper than hiring humans). It is the 19th century industrial revolution all over again but this time it is affecting everybody, except politicians. Although I suspect lying can also be automated. Now this rises the problem what to do when 30-50% of working age adults become unemployed. I can imagine how this will work in the much hated in the US 'welfare states', but the US society itself is in a lot of trouble the way it is set now.
    • I can imagine how this will work in the much hated in the US 'welfare states', but the US society itself is in a lot of trouble the way it is set now.

      You don't think "'welfare states'" will be in trouble if 30-50% of working age adults become unemployed? (Note, "welfare states" is not the term I'd use; I'm quoting the previous poster.)

  • Same problem.. (Score:2, Insightful)

    by greywire ( 78262 )

    The problem here is the same thing that is effecting all our decisions. We look at the top 1% (people, companies, whatever) and get angry because they have everything, and then look at the bottom 1% and get angry because they have nothing and think one must cause the other. And we completely overlook the middle.

    Its the middle thats important. Because from there you can fall to the bottom too easily. Only from there can you typically rise to the top. The middle is the backbone. As mentioned already, th

  • by A12m0v ( 1315511 )

    The US needs companies like JR and JP. They employ lots of people who seem to do nothing.

  • by miller60 ( 554835 ) on Wednesday November 30, 2011 @09:44AM (#38213254) Homepage
    Data centers have always created very few jobs due to the high level of automation in these facilities. As a result, they don't appear to be a compelling candidate for economic development incentives, which have traditionally been all about job creation. But there's a political component to this. Data centers represent far more than jobs or bricks & mortar. They have become symbols of the new economy, a tangible sign that a community is making a successful transition to the digital economy. Governors and local legislators understand the value of a press conference to announce a new project from Google, Facebook or Apple. That's why North Carolina has hit the data center trifecta [] with projects for all three of those companies, and continues to offer aggressive incentives for new projects. We've been tracking this trend for years, and there are more states than ever before offering incentives for data centers. That competition will intensify as the Internet continues to transform our economy, and ensure that tax incentives for data center projects are here to stay.
  • by vadim_t ( 324782 ) on Wednesday November 30, 2011 @09:47AM (#38213282) Homepage

    Large companies at first look seem to employ a lot of people. But the amount of people they employ is much smaller than you'd expect.

    If a small company needs a sysadmin, accountant and receptionist, then that's 3 people that are employed. If there are 3 such companies, then each needs their own, so that's 9 people employed.

    But what if they merge? All those people are probably not working at their limit at the new company. The sysadmin that managed 10 servers probably can manage 30. The new company is not so huge as to have more than one door, so only one receptionist is needed. The accountant can handle a bit more work. And so it's quite likely that 6 people will be laid off.

    If the objective is creating jobs then what you want is creating inefficiency: lots of small companies that employ people below their full capacity. Large companies are experts at employing as few people as possible. If there's one thing that would be counterproductive towards that goal, it's them.

  • by sirwired ( 27582 ) on Wednesday November 30, 2011 @09:47AM (#38213290)

    Municipalities and state governments are MORONS. There is not one reason to spend a single cent of tax incentives on a data center. They hear "Google", "Apple", "Facebook", and they have visions of hundreds of highly-paid software engineers sitting in row upon row of cubicles, and then going home to their brand-new houses, spending all their millions in local stores, etc.

    Not even the companies themselves promise much in the way of jobs, but the governments aren't paying attention.

    If you have finite electrical generating and grid capacity, it's far better to lure in SOME kind of manufacturing facility (they do still exist) then a data center that will book a huge portion of the output while employing a tiny handful of people that really don't get paid that much.

  • by WillAdams ( 45638 ) on Wednesday November 30, 2011 @09:49AM (#38213300) Homepage

    Increased automation was supposed to bring more leisure time and higher pay --- instead it's been used to prop up corporate profits: []

    I want a politician to stand up and demand a shorter work week --- force companies to either hire more workers or pay more overtime.

    • Re: (Score:3, Informative)

      by JoeMerchant ( 803320 )

      It worked in Germany.

    • by shentino ( 1139071 ) <> on Wednesday November 30, 2011 @10:39AM (#38213860)

      Unfortunately corporate greed knows no boundaries, certainly not international ones.

      You make people too hard to squeeze, they'll just squeeze who they can over in China.

      The mantra that "greed is good" fails to take into account that hurting other people is part and parcel of helping yourself if there's only so much pie to go around.

      Never mind that monopolies that hoard market share are responsible for the so called shortages in the first place.

      If you hoard, you'll cause a shortage.

  • by jbmartin6 ( 1232050 ) on Wednesday November 30, 2011 @09:54AM (#38213338)
    "In fact, Apple actually exemplifies some of the reasons why the U.S. has such huge unemployment and inequality problems: 'Digital' businesses like Apple employ far fewer people than traditional manufacturing businesses" That's quite a reach, to say Apple only needs X people, therefore this is a contributing factor to unemployment and inequality.
  • by Kr1ll1n ( 579971 ) on Wednesday November 30, 2011 @10:18AM (#38213614) [] - So the argument is from someone's business website who sells services and hardware in SC. (Born and Raised in Greenville, SC, so I know the area quite well).

    I can say for certainty that until someone actually provides hard numbers (i.e; X sysadmins, X maintenance, X Site Services or what have you), this article is just FUD. It serves no purpose other than to demean a company that actually created some jobs in a totally DEAD area.

    And since I live in the area where this DC is located, I can tell you, the area is beyond dead. I had a conversation with a business owner in Lincolnton, NC (about 10m from Maiden, and here was his exact response about the area being dead;

    "We are hoping to get some manufacturing jobs out here........"

    Brilliant game plan there.....If this area of NC wants jobs, they need to go after markets that haven't dried up already. Manufacturing will ONLY come back with proper tax\legislation policy, not on wishful thinking.

  • by MikeRT ( 947531 ) on Wednesday November 30, 2011 @10:22AM (#38213640)

    is that many states have their own absurd regulatory systems. For example, in many states you have to be "certified" to be a "professional hair braider." Even most pro-government liberals are probably spitting up their coffee hearing that you have to get a license that says you're competent to braid hair and can get fined or locked up for not having it, but it's really there. Same with interior decorating. Yes, interior decorating, not design (which has some architectural components).

    What is needed is a top-down audit with a prejudicial eye to remove regulations unless their absence would cause a clear and present danger to life, limb, property or the environment if removed. Virtually all professional licensing needs to be tossed, including for the legal profession. Part of the problem we have today with students bankrupting themselves at law school is because many states make it so that you can't sit for the bar unless you have a law degree (autodidacts need not apply!)

    It's a little known fact that many of the southern states are actually as regulation happy as the northern states. The main difference is our taxes tend to be lower and we're (AFAIK) right to work across the board. North Carolina is struggling in no small part because they have long had a profligate political system and a peculiar good ol' boy style of being selectively hostile to economic freedom.

  • by SuperKendall ( 25149 ) on Wednesday November 30, 2011 @11:06AM (#38214234)

    Note: What I am about to say remains true even for other companies, I just present things specific to Apple....

    You only see 50 jobs from Apple for a data center. But what about:

    * All of the construction jobs when building out the center.
    * All of the revenue from shippers going through nearby towns to and from the data center with supplies and equipment.
    * More abstractly, the side benefits of helping Apple grow. If you are helping a large company like Apple gain something, leverage that - you could put together incentives to convince iOS app developers to live in your town, or offer free training to those interested to learn iPhone development. Then you can help ride the tide of a rising Apple.
    * Also did they bargain to have Apple put in an Apple store locally (don't know if they have one already or not). That helps local revenue and residents alike.

    Basically I think it's short-sighted to complain about a low number of jobs when you can derive other benefits, plus as noted get the one-time benefits of construction related revenue.

      • The construction workers were likely with firms already. This was just another job for them, it may have kept them from being laid off but any hiring this job created would've been strictly temporary and may not have been local (large outside construction firm brought in because they can do the work cheaper). Materials likewise probably weren't bought locally, the construction company probably has national supply contracts.
      • Not much revenue from truck drivers. They stop for lunch and that's about it.
      • Develop
  • by Weaselmancer ( 533834 ) on Wednesday November 30, 2011 @12:10PM (#38215114)

    Currently it is impossible to make another Apple. The current business model is to think of something unique, patent it, and get bought by Apple/Microsoft/Google/Samsung/IBM/Someone Big. Reason being, patents.

    You need a patent "war chest" to fight off these big guys and survive in their ecosystem. Typically by buying smaller companies that have patent portfolios already. To get that you need cash. And to get that kind of cash, you already have to be gigantic.

    This is why none of these large players are pushing for patent reform. If software patents were to go away the ecosystem would open up and the big companies would have to face new competition.

  • Green Jobs (Score:4, Interesting)

    by DaMattster ( 977781 ) on Wednesday November 30, 2011 @12:29PM (#38215312)
    The same can be said for the so-called "Green economy." The green economy is also going to be highly automated. Obama is doing disservice by preaching job creation through green jobs. In fact, I'd wager much of the manufacturing behind green products will eventually go overseas to save money. My guess is we will never really see low unemployment again. The US population is too large for the economy and resources to really handle. As more and more industries automate, the baseline unemployment figures will continue to rise.

If you suspect a man, don't employ him.