According to an article by Bloomberg, the current state of competition among major U.S. firms is not sustainable in the long run:
Tech giants like Facebook and Amazon are the tip of the iceberg of a trend toward market concentration. That's good for profits, but a new study says it also risks harming productivity and growth potential in the long run.
According to Sophie Guilloux-Nefussi, an economist with France's central bank, the market share of the eight largest companies rose in more than 60 percent of the sectors of U.S. between 2002 and 2012.Profits have grown as a consequence, but investment and salaries have failed to keep up. The falling share of companies’ revenue ending up in the pockets of workers may deepen the polarization of society while the lower investments reduce growth potential for the economy in the years ahead.
Moreover, the barriers to new entrants have become higher, as shown by a sharp decline in the creation of new companies.
From what I gather, this does not bode well for the future of the economy.
Any thoughts?
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