According to the Bloomberg BusinessWeek, The S&P now has 74 information technology companies that collectively account for 25% of the index’s weighting, up from the 35 that represented just 6.6% of the weighting in 1990. We need a stricter way of describing a firm as a technology company.
Adding the word tech at the end of words such as adtech, biotech, cleantech, fintech, foodtech, doesn’t make it high tech and is exploitation and abuse of the word technology.
When Alan Kay, a fellow of Apple was asked to describe Technology, he said, let me put it this way, “It is not High Tech, if it was around when you were born,” seems to make a lot of sense.
According to my personal understanding, Technology really means new Techniques, Methods and Innovations driven by Science and Math, that significantly change the ways we did things before and with these new developments, we can can-do things more Efficiently, Faster, Better and Cheaper.
Describing a firm as a technology company tells you nothing about its business because when everything is technology, it becomes a classification that is devoid of its meaning. Facebook, DoorDash and Nvidia are all looked at as High-Tech companies. But the first two have proprietary SW to do certain applications and SW solutions, but Nvidia is a true high-tech company out of this bunch.
So let us stop confusing your customers and abusing the investors by exploiting the word Technology, unless your company meets the above litmus test.
