Over at FiveThirtyEight, Ben Casselman drops a spoiler on the whole “disruption” thing:
Talk to anyone in Silicon Valley these days, and it’s hard to go more than two minutes without hearing about “disruption.” Uber is disrupting the taxi business. Airbnb is disrupting the hotel business. Apple’s iTunes disrupted the music industry, but now risks being disrupted by Spotify. Listen long enough, and it’s hard not to conclude that existing companies, no matter how big and powerful, are all but doomed, marking time until their inevitable overthrow by hoodie-wearing innovators.
In fact, the opposite is true. By a wide range of measures, the advantages of incumbency in corporate America have never been greater. “The business sector of the United States,” economists Ian Hathaway and Robert Litan wrote in a recent Brookings Institution paper, “appears to be getting ‘old and fat.'”
Corporate America is doing fine, but why?
Consolidation is one factor:
Large companies are becoming more dominant in part by buying up their rivals. Hathaway and Litan find that, not surprisingly, most major industries have become more consolidated over time, as Wal-Mart and Starbucks have displaced corner stores and coffee shops.4 It’s a lot harder to compete with a multi-billion-dollar multinational company than with an independent business.
This entrepreneur stuff makes me think about crowd funding sites like Kickstarter. They’re great (I’ve completed 2 successful ones), but they usually kickstart projects, not businesses.
Remember, there’s no reason to fret. Very soon we’re not going to have to work ever again.