The two faces of the American economy: Digital superpower and structural second-rate – America's hidden losers

When 7 companies support an entire country: The unprecedented risk of the American economy

The 92 Percent Illusion: What US Economic Data Really Reveals About America's Future

At first glance, the American economy presents itself as an unstoppable superpower: one stock market boom follows another, driven by an unprecedented technological revolution. But behind the glittering facade of Apple, Nvidia, and the like, a deep rift yawns. While just seven tech giants shoulder almost all economic growth and mobilize investment sums of historic proportions, the "second tier"—the traditional middle class and industry—struggles to keep up. They suffer from stagnant productivity, a glaring shortage of skilled workers, and the unforeseen side effects of Trump's tariff policies. The US economy has split into two completely isolated worlds. This unprecedented concentration of economic power is not merely a statistical phenomenon but harbors a massive systemic risk—and explains the deep political divisions of a country whose economic foundation rests on fewer and fewer shoulders.

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America's hidden losers: Why millions of small businesses are suffering despite the economic boom

The concentration of economic power in the American economy has reached a historic level that even seasoned economists struggle to explain. The so-called "Magnificent Seven"—Apple, Microsoft, Amazon, Alphabet (Google), Nvidia, Meta, and Tesla—will represent roughly 33 to 34 percent of the total market capitalization of the S&P 500 in June 2026. By comparison, in 2015, this figure was only 12.3 percent. In just one decade, economic power has almost tripled and become concentrated in the hands of a few companies—a development for which, according to analysts at the data service DataTrek, there is no historical precedent.

Measured in terms of real economic output, the finding is similarly spectacular. Harvard economist Jason Furman calculated that while investments in information processing equipment and software accounted for only about 4 percent of US GDP in the first half of 2025, they simultaneously explained roughly 92 percent of total GDP growth during that period. Without this technology sector, US GDP growth would have been close to zero percent. An analysis by the Stripe Foundation, based on data from the Bureau of Economic Analysis, calculated that demand for computers and software accounted for 46 percent of real potential GDP growth in 2025 – an all-time high that far surpasses the boom years of the dot-com era.

The capital flows into these top tiers defy comprehension. Alphabet, Amazon, Meta, and Microsoft are planning combined capital expenditures of $650 billion for 2026. Add Oracle, and the total exceeds $700 billion—2.2 percent of the US gross domestic product. Big Tech's total technology-related capital expenditures in 2025 amounted to roughly 1.9 percent of GDP—a figure larger than the historical capital investments in nationwide broadband expansion, the Apollo program, and the Interstate Highway combined.

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Market capitalization versus real contribution: What the numbers really say

However, these figures must be interpreted carefully to avoid drawing false conclusions. Market capitalization is not a direct measure of GDP contribution—it measures the present value of all expected future earnings, often discounted over decades. The fact that the Magnificent Seven make up a third of the S&P 500 does not mean they generate a third of American economic output. Nevertheless, the correlation is significant: These companies control critical digital infrastructures upon which all other sectors of the economy are increasingly dependent. Cloud services (Amazon Web Services, Microsoft Azure, Google Cloud), search engines, social networks, operating systems, and semiconductor architectures are no longer consumer goods, but rather means of production in the modern economy.

Even sectoral classifications are misleading. Information technology in the narrower sense (NAICS sector 51) accounts for only around 5.4 percent of GDP. However, as an analysis by Finexus Research shows, technological value chains are distributed across all sectors: financial services, healthcare, logistics, manufacturing – digital technology is a driver of productivity everywhere. The true importance of the technology sector is therefore far greater than sectoral statistics alone would suggest.

The Second String: Seven Trillion Dollar Silent Majority

So who are America's economic second tier? They are large, diverse, indispensable for the daily functioning of society – and systematically underrepresented in political and media discourse.

The manufacturing sector generated approximately $3.0 trillion in added value in the first quarter of 2026, accounting for 9.4 percent of GDP. This share is historically low – it was still at 13.1 percent in 2005 – but has nevertheless steadily increased in absolute terms. Measured by its contribution to added value, the US remains the world's second-largest manufacturing nation after China. The sector employs 12.6 million people in more than 239,000 companies.

Even more impressive is the weight of the so-called middle class, meaning small and medium-sized enterprises (SMEs). According to the Small Business Administration, there were approximately 36.2 million small businesses in the US in 2025 – representing 99.9 percent of all businesses in the country. They employed 62.3 million people, or 45.9 percent of all private-sector workers. Their share of total economic output is estimated at 43.5 percent of GDP. Between January 1995 and December 2024, small businesses created 20.7 million net new jobs – compared to 13.2 million for large companies.

This second tier encompasses far more than manufacturing. It ranges from construction and retail to healthcare, agriculture, and energy, encompassing millions of craft businesses, service companies, and local merchants. Together, these sectors form the backbone of the physical economy, the part that produces, transports, distributes, and makes goods physically accessible—the part that residents of Detroit, Pittsburgh, or Tulsa experience daily. Not as an app on a smartphone, but as a factory building, a supermarket shelf, or a hospital bed.

Competitiveness in global comparison: A nuanced picture instead of a clear judgment

The competitiveness of America's second-tier industries is not a uniform measure – it depends heavily on the subsector and the measurement method. In the manufacturing sector, the truth lies somewhere between triumphant rhetoric and defeatist fundamental criticism.

Globally, the USA will rank first in the Deloitte Global Manufacturing Competitiveness Index, with an index score of 100.0 – ahead of Germany (90.8) and Japan (78.0). Measured by actual production output, the US accounts for 17.3 percent of global manufacturing value added, while China reaches 28 percent. This gap is significant, but the USA still produces more than the entire European Union combined – a result of its structural strengths in high technology, pharmaceuticals, aerospace, and chemicals.

Labor costs are the most obvious competitive obstacle compared to Asia. Average weekly wages in the US manufacturing sector were around $1,807 in 2025, barely higher than ten years earlier when adjusted for inflation. US manufacturers cannot compete on cost efficiency with Chinese, Vietnamese, or Mexican wage structures – but they can compete on quality, reliability, intellectual property protection, and increasingly, proximity to the end market. This is precisely where the reshoring debate comes in: not all products need to be cheap – they need to be reliably available, technologically advanced, or produced with strategic security in mind.

Agriculture and energy are the relative strengths of America's second-tier economies on a global scale. The US is a net energy exporter and possesses the world's largest natural gas reserves, as well as an expanding shale oil system. In the agricultural sector, American producers of corn, soybeans, wheat, and cotton are global price setters, supported by industrialized production methods, favorable soil conditions, and government subsidy programs.

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The gaping gap: How the First Guard structurally distances the Second Guard

The fundamental structural problem is the increasingly divergent productivity growth between sectors. Companies at the technological forefront are experiencing strong productivity gains, while in the vast majority of companies, productivity has stagnated or even declined for decades. The Federal Reserve Bank of Chicago documented that for over four decades, information technology was virtually the only sector with consistent overall factor productivity gains—all other sectors contributed little to this.

Brookings economists describe the consequence precisely: Companies on the technological frontier have become detached from the masses, increasingly controlling concentrated markets and reaping disproportionate profits. At the same time, the automation of low- to medium-skilled jobs has shifted the demand for higher skills, driven down wages at the lower end, and altered income distribution to the detriment of labor. This dynamic explains part of the cultural resentment that Trump mobilizes among his electorate—the perceived sense of being left behind is grounded in real economic reality.

The gap is also evident in the availability of capital. The Magnificent Seven alone plan to spend $700 billion on capital expenditures in 2026. In contrast, 40 percent of all small businesses in America struggle with debts exceeding $100,000 and dwindling opportunities to obtain bank loans. The capital gap between Big Tech and the rest is structural and steadily widening.

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Trump's two-front game: Big Tech courted, middle class burdened

The Trump administration pursues a policy that appears contradictory at first glance, but on closer inspection follows a recognizable logic: Big Tech is instrumentalized as a geopolitical means of exerting pressure and a prestige lever, while the traditional middle class primarily serves as a rhetorical resource, but is significantly burdened in realpolitik.

The high priests of the first rank – Nvidia CEO Jensen Huang, Apple CEO Tim Cook – sit in the front row at White House press conferences. Apple publicly committed to investing $600 billion in the US over four years, Nvidia announced $500 billion for AI infrastructure, and Johnson & Johnson pledged $55 billion for expanding its manufacturing facilities. The White House celebrated these announcements as the "largest reshoring wave in history." These investments are real – but they largely consist of capital-intensive, highly automated facilities that create comparatively few jobs in the traditional sense, but possess enormous political symbolic value.

At the same time, the Trump budget for fiscal year 2026 cut funding for the Small Business Administration (SBA) by 33 percent. Nearly all support and advisory programs for entrepreneurs and small business owners were eliminated: the Women's Business Centers, the SCORE mentoring program, the State Trade Expansion Program (STEP) for international small businesses, and veterans' entrepreneurship programs were all slashed by 46 percent. In May 2026, the SBA also proposed cutting funding for consulting and training services by nearly 94 percent.

The tariffs, officially imposed on behalf of American workers, are in practice a burden on the very companies they are meant to protect. Small businesses that rely on imported intermediate goods—from electronics and steel components to textiles—were estimated to have incurred at least $166 billion in additional costs due to Trump's tariff policies by mid-2025. The planning uncertainty, the weekly changes to tariff announcements, and the sudden loss of import sources have significantly dampened investment activity among small and medium-sized enterprises (SMEs).

The White House counters this criticism by pointing to record volumes in SBA loan programs—reportedly guaranteeing $45 billion in 7a and 504 loans in fiscal year 2025, the highest amount in the agency's history. The permanent implementation of the small business tax deduction and the deregulation drive, which allegedly saved $110 billion in regulatory costs, are also presented as successes. The truth likely lies somewhere in between: Lending is booming, while at the same time the advisory and training infrastructure, which particularly benefits small businesses without expensive business consultants, is being systematically dismantled.

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The reshoring gap: Announcements versus reality

The core promise of Trump's trade policy is the industrial renaissance of America – the repatriation of manufacturing capacity from abroad. One year after "Liberation Day" in April 2025, a sobering interim assessment can be made, distinguishing between justified successes and sobering structural problems.

Construction investment in manufacturing facilities has nearly tripled since 2021, rising from $76.2 billion in January 2021 to approximately $224 billion in October 2025. The Reshoring Initiative projected around 245,000 announced jobs through reshoring and foreign direct investment by 2025. Since 2010, over 2 million such jobs have been announced, of which 1.7 million have actually been filled.

However, the BLS (Bureau of Labor Statistics) labor market data paints a sobering picture: In 2025, the US manufacturing sector lost a net total of around 89,000 jobs, even though the tariffs were supposed to protect employment. The reason lies in a paradox: Upstream producers of steel and aluminum gained jobs, but downstream manufacturers that use steel as an input material lost more jobs because their production costs rose before domestic reshoring alternatives became available. The ISM manufacturing index registered a value above 50 (expansion) in March 2026, but fell back to 47.2 (contraction) in April – the sector is in a fluctuating sideways trend, not a clear upswing.

Added to this is the labor shortage, which tariffs cannot structurally solve: Nearly 500,000 manufacturing jobs are currently vacant because modern factories require digital control skills, robot programming, and AI-related qualifications that are not adequately taught within the existing training infrastructure. The Reshoring Initiative determined that manufacturers would relocate 30 percent of their offshore production back to their home countries if sufficient qualified domestic workers were available. However, with tariffs at 15 percent, only 23 percent would return anyway. The labor shortage remains the biggest obstacle.

The systemic risk factor: When a country depends on seven companies

The extreme concentration of economic dynamism in the A-list creates systemic risks that are increasingly coming to the forefront of public awareness. In October 2025, the Magnificent Seven's share of the S&P 500 exceeded 37 percent for the first time, almost three times higher than in 2015. Analysts at JP Morgan Asset Management spoke of a "nervous" dependency. By 2026, the Magnificent Seven had underperformed the S&P 500 for the first time in years – their collective market capitalization fell from over $22 trillion to around 33 percent of the index.

What would happen if the level of AI investment – ​​driven by rising interest rates, a wave of regulation, or technological disappointment – ​​were to fall abruptly? Harvard economist Furman and others have repeatedly pointed out that an economy in which 92 percent of growth depends on 4 percent of investment activity is structurally fragile. All the other 96 percent of investments combined generated just 0.1 percent annualized GDP growth in the first half of 2025.

For overall economic resilience, the second tier of industries is therefore indispensable in the long term – not despite their more modest productivity gains, but precisely because of their breadth, their regional distribution, and their ability to secure stable employment across all demographic strata. Technological excellence and industrial breadth are not alternatives, but complementary strategies.

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What an intelligent economic policy should achieve

The crucial economic policy question is not whether the US should defend its digital leadership – it will do so anyway, with or without government support. The question is how the productivity dividend of the leading companies can be transferred to the wider economy.

Technological progress has historically diffused slowly between sectors. Steam engines were invented in 1769, but their impact on British productivity statistics only became measurably apparent some 50 years later. Personal computers became available in the 1970s, but their effects only began to show in GDP data in the 1990s. AI may follow a similar pattern. Brookings economists argue that the key to spreading the productivity dividend lies in targeted policy measures: competition law, digital access, education and training, labor market regulation, and investment incentives for non-technology sectors.

The Trump administration, on the other hand, relies primarily on tariffs as an industrial policy tool—one that fails to address structural skills shortages and a lack of investment infrastructure. At the same time, government advisory services for those companies most dependent on public support are being systematically dismantled. The result is an economic policy that neither hinders the first tier of companies nor truly advances the second tier—and attempts to harness the political mobilizing power of both realities simultaneously: the glamour of the Silicon Valley superpower and the identity politics of marginalized factory workers.

Whether this will be sustainable in the long run depends less on the next quarterly figures than on whether America can find an answer to the structural divergence of its economic sub-worlds – before this division turns into political instability that even the top brass can no longer compensate for.

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