An economic landscape dominated by few firms has traditionally led to concerns about market pricing power. Monopolies can set price above cost and earn above normal profits. Economic power can be transformed into a form of influence whose mechanics are themselves not well understood. As we consume content on these large platforms such as Facebook, we react with comments and by sharing these comments with friends. Our reaction leaves data footprints which are assessed by computer programs. Algorithms then evaluate our reaction and update the information being fed to us. These are complex algorithms that interact with the data in a technology called machine learning. How updated content influences subsequent interactions is unclear, but there will be echoing effects whose final outcome is unknown. What is known is that these algorithms act as gatekeepers ofinformation and knowledge for society and, as such, they wield enormous power. The point to note, however, is that no one group or person is exercising this power . It is the very opacity of the binary code that is concerning, as it carries us into the realm of Ray Kurzweil’s “singularity,” where the binary world supersedes the world of living neurons .
The appropriate larger concern with OB is not pricing power but rather the power to shape ideas. The forces at work are subtle, and unsuspecting consumers become molded in a caricature of the homogenous user. The issue is not just point-in-time pricing power but rather the impact over time. By changing the context and environment or rules of the game, the game itself is changed. When competition for scarce resources drives each node to work harder to capture its share, others are strengthened by this very competition since survival demands a clever response.2 Lack of competitors can stifle innovation by removing this struggle for survival, but when there is the threat of entry on the horizon even OBs are competing. However, strategic actions taken in the process of competition give OBs the power to influence popular culture. Voices raised on social media are echoed across nations in easy to remember, and replicate, sound bites, which then drown out complex analyses.3
In a powerful summation of the antecedents of the vote in Britain to leave the European Union, Tony Blair writes that “The Center must hold” not only in Britain but also globally. The tension that led to this referendum is universal. Populist insurgencies against the elite, fueled by movements of both the left and right,
can spread and grow at scale and speed. Today’s polarized and fragmented news coverage only encourages such insurgencies - an effect magnified many times by the social media revolution... the spirit of insurgency, the venting of anger at those in power and the addiction to simple, demagogic answers to complex problems are the same for both extremes. Underlying it all is a shared hostility to globalization.