Why is Big Business Losing Control?
In the old economy, everyone worked together in big vertically-integrated corporations because most business opportunities required massive capital investments and economies of scale to succeed.
Technology has changed all that.
Instead of having to perform all business functions in-house and hire all resources directly, businesses can now outsource to find the best value because technology makes it possible to get work done anywhere anytime.
Think of it as peer-to-peer working, where a network of skilled participants make their resources available directly to their peers to accomplish projects in the open market without belonging to the same closed corporate structure.
This is especially true for information businesses like entertainment, media, education and financial services where nothing physical is produced.
Smaller businesses are more viable now because the cost of starting a new business in most information-based industries is nearing zero. With non-existent overhead, unlimited flexibility and the ability to change course on a dime, small businesses and individuals will start taking business away from the old economy hand-over-fist. It no longer pays to be so large. There are now actually diseconomies of scale.
The decline of the old economy can be seen daily in the news about the death of newspapers, the migration of manufacturing and the shift to digital entertainment and free downloads.
In a highly volatile, hyper-innovative economy in which the means of production, distribution, and marketing are relatively inexpensive and available to anyone, the race goes to the fleetest of foot, not the biggest of bulk.
Richard Hooker, The Post-Employment Economy, Part 1
