July 31, 2020 at 08:09PM
Google’s search for mid-life meaning
WITH THE bosses of three other technology giants—Amazon, Apple and Facebook—Sundar Pichai, chief executive of Alphabet, was grilled by a congressional committee in Washington on July 29th. (Fittingly for the internet age, as well as that of covid-19, the four appeared via video link.) That Congress is fretting about the companies’ power is a mark of their success. Consider Alphabet. Its subsidiary Google dominates online search as well as the online “ad stack”, accounting for all of its parent’s $34bn in profits. Yet, as our American cover story this week argues, at just 21 years of age Google is undergoing a mid-life crisis. Its very dominance limits its growth in search and online ads; ambitious new projects are yet to yield a breakout success. Its freewheeling culture functions less well now it has well over 100,000 employees. And, as this week’s hearing reminded the whole industry, politicians and trustbusters are seeking to cut Big Tech down to size. Like many sufferers from middle-age spread, Google may have to slim down and refocus.
Technology companies have done nicely during the pandemic: Amazon, Apple and Facebook all reported bumper quarterly profits on July 30th (though Alphabet’s declined). But for the commercial-aviation industry, from makers of aeroplane parts to keepers of airport shops, covid-19 has been a catastrophe. At the depths of the crisis, two-thirds of planes were parked; around one-third still are. Although some governments are even bribing tourists to come, visitors are not flooding back. The aviation’s sector’s market capitalisation, around $1.3trn before the coronavirus struck, has dropped by $460bn. Traffic may not rebound to last year’s level until 2024. When it does, aviation can return on a more sustainable footing, both environmentally and financially. But government rescues—bail-outs, and suspension of rules to reallocate unused airport slots—have so far been too generous to incumbent flag-carriers, even though they come with some green strings attached.
For the world’s migrants the immobilisation caused by covid-19 has been a blight. Millions face deportation; millions have gone home; millions are stranded, having lost their jobs. Many have lost the chance of a better life abroad. Since the pandemic started governments have imposed more than 65,000 restrictions on travel. As they open up again, they may be less willing to accept migrants, out of fear that they will bring disease or cost natives precious jobs. As we argue in our cover story in Asia and Europe, neither worry is well-founded. Migrants are vastly outnumbered by business travellers and tourists; and by bringing skills, spending wages and paying taxes, they boost prosperity. And the pandemic has made some natives appreciate the benefits of mobility: their doctors, nurses, care-home workers and hospital cleaners are often foreign-born.
Having plummeted in the early stages of the pandemic, the prices of emerging-market bonds and shares have rallied remarkably, thanks largely to an ample supply of dollars from the Federal Reserve. China’s strong recovery has pushed up commodity prices and helped to pull up the two-thirds of developing countries that export primary products. Fiscal loosening and forgiving financial regulation (eg, India’s moratorium on loan repayments) have also helped. Yet worries remain. The immediate danger from the virus, to physical and financial health, has not yet passed. And it may do lasting economic damage, having disrupted global supply chains, made investors wary and interrupted children’s schooling. A sign of one country’s problems: for the first time since apartheid, this week South Africa agreed to borrow from the IMF.
Regional inequality afflicts many countries. Italy may be wise to use money it gets from the EU’s covid-19 stimulus plan to lift its poor south. But regional disparities in Britain are unusually wide, and getting wider. The richest bit (in central London) is 30 times better off than the poorest (Ards and North Down, in Northern Ireland). Unusually, too, people are not moving from places that are faring worst to those doing best; and except for London and Edinburgh, thriving cities do not lift the areas around them. As we report in our cover story in Britain this week, the reasons for this are many and complex, including education, infrastructure, planning policy and Britain’s (in particular, England’s) centralised system of government. Having won a swathe of once solidly Labour seats in last December’s election, Boris Johnson wants to redress the balance. Although the prime minister has a grand slogan—”levelling up”—he has no plan. The government has thrown some money at small towns and cities and is promising more cash for public transport in northern England. But devolving more power, including the raising of taxes, to metropolitan governments would be a more important step.
Author: | Post link: https://www.economist.com/graphic-detail/2020/07/31/googles-search-for-mid-life-meaning
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