The New Economy vs. the Old Economy

Sergei Brin is a Russian immigrant.  He’s the founder of Google.  He’s a billionaire and the 14th wealthiest person in the U.S. He’s at the top, but hasn’t created all that many jobs. Other tech jobs go to China.

“The big names in tech might be awash in capital and might have made their founders billionaires (New Economy founders typically retain large blocks of their own stock), but they employ surprisingly small numbers of U.S. workers. Google, the valley’s largest employer, has 46,000 people on its payroll. Facebook employs only 4,600, and Twitter, in San Francisco, fewer than 2,000. Apple claims 400,000 people putting together components and creating apps and other extras for its iPhones, iPads, iPods, MacBooks, and desktop computers. Yet only 16,000 of those are on the payroll in Cupertino. Another 31,000 work at Apple operations in Texas and other states, but the vast bulk of manufacturing is outsourced abroad via contractors to China and other cheap-labor purgatories. Yet those 16,000 in Cupertino make Apple the second-largest employer in the valley. Kotkin compares those numbers to the 212,000 employed by GM, the 170,000 employed by Ford, and the more than 100,000 employed by Exxon Mobil, all three presumably Old Economy dinosaurs. The New Economy generates prosperity all right, prosperity that mostly flows to those in the upper echelons.”

Link to Silicon Chasm