Author Criticizes the Internet Economy, Silicon Valley

Andrew Keen, the author of The Internet is Not the Answer, told Press:Here the Internet has not lived up to its promise of a more egalitarian world and a stronger economy.

"At the moment, the Internet is not working," Keen told Press:Here.  "It's compounding inequality, deepening the structural unemployment crisis and creating a surveillance economy."

The problem is that the world was promised a new global economy and jobs, but the reality was a "precariot," Keen said, because of the precarious new service economy created by startups such as Uber, Lyft, TaskRabbit and others. "Uber is great if you want a part-time job," Keen said. "People are working a few hours in the morning but they have no benefits, no unemployment and no job security."

Instead, that precarious job model works only with inequality.

"It's a catastrophe actually for working people," he said. "It's great for Travis Kalanick and it's great for the investors of Uber."

The inequality is apparent because only a handful of companies end up as winners in a "winner take all" economy, he said.

Companies such as Google and Facebook have grown huge and rich, while smaller companies such as Yelp, Twitter or LinkedIn are facing tougher times in an increasingly monopolistic economy that stifles innovation and disruption.

"We were promised more opportunity and equality," he said. "Instead it's created monopolists."

In the 1990s, Microsoft loomed over technology and "stymied innovation," Keen said. It was lawsuits that broke much of its hold on technology and led to companies like Google and Facebook emerging. Unfortunately, now they buy up companies or dismantle them rather than creating innovation -- so they, too, need to be stopped in the courts.

"Ironically, more regulation will make more innovation rather than the reverse," he said.

The final nail in the coffin is the creation of what Keen calls a "surveillance economy," or devices tracking users.

"We need to get away from the free model," he said. "Everyone is being watched all the time because there's no other business model."

If apps are being offered for free, then they must be getting something out of it so they can make a profit. That something is usually user information that can be sold to third parties.

"People have to wake up," he said. Unless they pay for the thing, then they're the product and they're being watched."

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