The data, it would appear, are clear. Market concentration has risen, which has led to a fall in business dynamism, a lower labour share of income, and (apparently) subdued investment rates.
What is clearly missing from these discussions, however, is any sense of between industry competition. This is arguably the most critical source of competition that is evident today in the business world. Standard metrics used in competition analysis fail to capture this new reality.
The major technology companies are competing against each other in an array of fields, including cloud services, augmented reality, gaming, artificial intelligence chips and self-driving cars, to name a few examples.
In any case, the GDP numbers show record spending on software and R&D as a share of real GDP. Core inflation remains subdued as well.
E-commerce sales hit a record high as a share of total retail sales in Q1 (10.2%, up from 9.9% in Q4 2018). Walmart’s E-commerce revenues grew 37% y/y in the first quarter. Amazon’s innovation has forced other companies to catch up.
