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The author is the chief global strategist of Morgan Stanley Investment Management, and the author of “Ten Rules for Successful Countries”

The world’s technology giants have been so deeply integrated into the imagination of the public that few people can imagine a digital world dominated by any other name. But this assumption ignores how quickly capitalism can downsize giants.

The market value of US technology companies ranks among the top ten in the world, and many commentators and investors believe that there is no reason to question their continued dominance. Dozens of analysts rate every major technology company, and each of them currently has a buy rating on Alphabet, Amazon, and Microsoft. Apple and Facebook are also more popular than typical stocks.

The traditional saying is that these giants have grown bigger, faster, and more durable than their predecessors. As Internet platforms, they benefit from the “network effect”, increasing efficiency and motivation when acquiring customers and consolidating control over the economy at an unprecedented speed, which is said to have never been seen in “the history of capitalism.”

Only we have seen many before.

Data going back to 1970 shows that in this decade, the median earnings of the top 10 companies in the top 10 have increased by about 330%, and their stocks have outperformed the market by more than 230%. The top 10 in the 2010s were not much different from normal: earnings increased by 350%, and their stocks outperformed the market by 330%.

By the end of the 2010s, the top 10 accounted for 16% of the global stock market value, similar to the share of the top 10 in the late 1970s and late 1990s.

Given the popularity of American technology brands, people have generally forgotten that Amazon and Facebook were not among the top 100 companies by market capitalization a decade ago. However, their rapid rise is not so unusual. On average, the companies that entered the top 10 rose by about 75 places within 10 years to reach their goals, and then gradually disappeared.

Since 1970, a company that ranked 10th in the world’s top 10 has less than one-fifth chance of being on the list in the next 10 years. Oil companies dominated this list in the 1970s, followed by the Bank of Japan in the 1980s. The technical name peaked in the 1990s, but the cast is constantly changing.

Only two European technology companies, Deutsche Telekom and Nokia, have entered the top 10, entered the club in the 1990s, and then quickly fell. Only one company, Microsoft, constantly reinvents itself, enough to remain in the top 10 clubs for 30 years.

When capitalism is operating, explosive growth is normal. The same is true for creative destruction. Big companies become clumsy. They talk about being paranoid, but they are not actually out of touch with the tastes of young people and giving way to more flexible competitors.

There are other threats.Recently, China has shown how fast Regulatory attack It can knock down corporate giants and drive Alibaba out of the top 10 in the world. Whether or not this indicates a possible disaster for American technology giants, the risks posed by fanatical regulators are not as urgent as capitalist competition.

The Internet itself is constantly evolving. Giants are competing with upstarts to build the next Internet platform, which may incorporate elements of artificial intelligence and augmented reality or virtual reality. Facebook is trying to reinvent itself as “Metaverse,” Treat the Internet as a 3D virtual space seamlessly connected to the physical world. However, as of today, the most advanced meta-universe prototype exists on the game platform operated by the new company.

The huge shifts in the global market were triggered by central banks raising interest rates to slow the overheated economy; coincidentally, these shifts declined at the turn of every decade. This seemingly imminent transformation at the beginning of 2020 can be said to have been delayed by the pandemic, which has brought a new round of loose money from the central bank into the stock market, and a flood of new customers into large Internet services.

However, this probation may pass. By the end of last year, compared with the rest of the world, the profit growth of global technology giants began to slow down. In the past, the slowdown in earnings growth was related to the weaker relative returns of the top 10, and most people would eventually fall from the top 10.

In the 10 years after a company enters the top 10, they will usually see the profit growth rate for the next 10 years drop from 16% to 4% per year. As profit growth declines, profitability and market attractiveness are also declining. After entering the top 10, these giants usually see returns become negative, and in the next ten years, their relative performance will shrink by 70%. In fact, they returned all the gains they made during the summit process.

On average, the ranking of the top 10 companies has fallen by about 60 places in the next ten years-a result that should not be mourned. Competition and loss are at the core of a well-functioning capitalist system. This is why the giants of the last decade tend to bring such mediocre returns in the next decade, and shrink in the imagination of the public. Unless capitalism is truly broken, this model is expected to reappear.