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How Big Tech Got Even Bigger

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A recent article in the Wall Street Journal (WSJ) highlighted the growth path of the biggest five technology firms – Apple, Microsoft, Amazon, Alphabet (Google) and Facebook. The staff at the WSJ point out that while these five firms were giants before the pandemic hit, they have become even bigger over this past year.

One can easily understand this trend when you realize that so much of what we now do on a daily basis involves their technol​ogies. We use Amazon to shop, Google to search, Apple and Facebook to communicate, and Microsoft hardware and software to work remotely.  While many brick-and-mortar companies are failing, these five tech giants are experiencing growth like we've rarely seen before.

At the end of 2019, the market capitalization value (i.e., the value of their stocks) of these five firms was $4.934 trillion. At the end of 2020, this market value had risen to $7.511 trillion – a 52% increase. Their impact expands into other economic dimensions as well: Amazon alone added about 500,000 new workers over the past year. Microsoft has seen users of its Teams software platform (similar to Zoom) triple over the past year, boosting its market value to more than $1.8 trillion (second only to Apple's $2.232 trillion). Amazon now employs over 1.3 million workers globally, and it is estimated that it will soon overtake Walmart as the largest employer in the United States.

While regulators may eventually find a way to rein in these giants, most economists see this trend continuing well past the end of the COVID-19 pandemic.