Our view is yes, or at least yes for the the next couple of decades. Despite the growing role small businesses are playing in the U.S. and global economy, size and scale will continue to provide competitive advantage in many industries.
Two interesting posts on this topic last week. PSFK - one of my favorite trend watching blogs - has a post called "How Long Can P&G Last?" The post questions whether or not large consumer products companies like P&G and Unilever can continue to compete when consumers increasingly are attracted to local brands and brands that reflect consumer values. Key quote:
"Travel through Europe looking at new ‘local’ brands made the team at PSFK wonder about modern brands and whether ‘holding companies’ like P&G and Unilever can really last doing business the way they are."
The other related post is from Always On and is called "The Studios are Back." Key quote from the CEO of online video start-up company Quarterlife on the role big media companies play in online video:
"...the days of user generated video success, with a hit on YouTube, are essentially over. The real power for online video success comes from the studios and big media companies who produce and distribute viable content."
The death of large corporations has been a popular prediction since the early days of the Internet. In the mid to late 90S it was commonly believed the Internet would quickly kill both large retailers and large brands. A decade later Walmart, Pepsi, P&G and other big retailers and CPG companies are doing just fine. And as PSFK's post points out, big CPG companies are not going away anytime soon.
The death of large media companies is another popular prediction. Many claim they will be replaced by user generated content. While the media industry is clearly going through substantial change, it seems from Quarterlife's perspective that big media companies are not quite dead yet.
In almost every industry we track we see consolidation resulting in fewer, but much larger, global corporate giants. At the same time, in most industries we are also seeing growing numbers of small businesses and declining numbers of mid-sized businesses. This industry structure will likely become increasingly common over the next decade (we cover this in more detail in The New Artisan Economy research report).
While somewhat counter intuitive, very large corporations will continue to grow in size even as we move to a more decentralized economy with growing numbers of small businesses.
Disclosure: I've done work for P&G in the last year.
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