Interesting take, but a focus on shareholder value is of course actually very important for sustainable innovation. The author questions the idea that the stock market is a source of capital that is beneficial to corporations by pointing out that the stock market actually draws money out of corporations. He seems to think that this is wrong, hampers innovation and investment in the core businesses, creates income inequality with rich investors taking all the money away from the people who are actually innovating, etc.

To me this seems like a very narrow way of looking at things. Of course on net the stock market takes money away from corporations. If the market were not on net transferring money to shareholders why would anyone want to buy shares? It is exactly these cash extractions from successful corporations that allow risky new companies (which may fail and loose all of the investors money) to raise money on the market. People are willing to risk losing their money on some crazy new idea precisely because they will be able to extract profits if the company is successful. If companies didn't pay their investors back, there would be 0 incentive to give them the cash they need to get off the ground in the first place.

Secondly, it makes no sense to denigrate the people repeaing the benefits of a corporations success as "value extractors" as opposed to the "value creators" at the company. First off, as the article points out employees of the company are compensated with stock and stock options and thus the share price and earnings growth is an important factor in attracting and retaining talent. If the company is focused on creating shareholder value and the stock price is going up that's only going to help the quality of the team and their innovative capabilities. What do people do with the money they make in the stock market? Many times, reinvest it in another innovative company! Is using money from past successes to fund promising new enterprises at startups and existing corporations a bad thing? I think it's a good thing and very important. Let's not forget that people owning shares aren't just Wall Street fat cats. There are retail investors and ordinary people's retirement funds too, and extracting money from corporations to fund people retirements is a good thing too.

In fact, a company can invest as much or as little as it wants in research and innovation. There is no requirement at all that a corporation pay a dividend or buy back stock. Amazon doesn't, but investors can still profit off share price growth because there are other investors willing to buy the shares expecting that there will be dividends and buy backs in the future as Amazon's earnings continue to grow.

Now of course it is entirely possible that management could make short sighted decisions and under-invest in the business to boost the share price in the short term but ultimately decrease the long term value of the shares because of the lack of innovation. However, in an ideal world where information is not hidden hopefully management, shareholders and the board would notice this kind of short sighted behavior and try and push for the business maximize the long term value of the business.

The system can sometimes create some perverse incentives, but I think it is safe to say that on the whole corporations focusing on shareholder value is a net-positive for innovation in the world.