The era of the huge conglomerate is over.
Illustration credit: Andy Gilmore
Yes, ‘New’ is in there twice.
e New New Economy: More Startups, Fewer Giants, Infinite Opportunity. Chris Anderson aptly wrote about the disaggregation of large corporations that is happening now and the growing diseconomies of scale:
“As venture capitalist Paul Graham put it,”It turns out the rule ‘large and disciplined organizations win’ needs to have a qualification appended: ‘at games that change slowly.’ No one knew till change reached a sufficient speed. The result is that the next new economy, the one rising from the ashes of this latest meltdown, will favor the small.”
Moving to the topic of technology that powers this change, Chris says:
“To all the usual reasons why small companies have an advantage, from nimbleness to risk-taking, add these new ones: The rise of cloud computing means that young firms no longer have to buy their own IT equipment, which helps them avoid having to raise money or take on debt. Likewise, the webification of the supply chain in many industries, from electronics to apparel, means that even the tiniest companies can now order globally, just like the giants. In the same way a musician with just a laptop and some gumption can accomplish most of what a record label does, an ambitious engineer can invent and produce a gadget with little more than that same laptop.“