Love this perspective! It's so true how some of these massive shifts go unnoticed. The old 'gentlemans agreements' really shine a light on the ongoing talent war, especially with AI development. Makes you wander how it'll play out.
Totally. Even big changes go relatively unexamined if they happen gradually enough. And I do wonder how the changes will play out—all I know is that it will be different. 🤣
Great stuff, Brad! I suggest one unifying factor across the drivers you've listed: huge increases in the speed of information transfers that have accompanied the digital age. I think it's more of a force multiplier rather than a direct cause. Tied to this, many firms have become much better at exploiting data, whether to optimize product development, improve marketing segmentation, or identify areas of operational efficiency.
Another tidbit I'd be curious to hear your thoughts on: I'd hypothesize that the rise of the digital economy has led to a big rise in the importance of intangible capital, especially software but also IP and brand. Such intangible capital is much more inimitable than other aspects of a market-leading organization, and market concentration should follow in due time if intangible capital is both (a) more important now than it used to be and (b) super important in most industries. Thoughts?
Ayyye! Thanks for reading and making genuinely thoughtful responses.
You make a great point about data—cant believe I left that out, but its a huge force multiplier. Omniscience (not actually, but close enough) is a massive unlock and obviously we have no AI if there wasnt an infathomable amount of information available for these companies to crawl. Fantastic point.
And I think your hypothesis is strong too. As you know, investment in intangibles (software, data, R&D, brands, organizational tactics) has grown several times faster than investment in physical capital, and generally exceeds tangible investment in the big, really advanced economies. Theres a reason software and data companies are among the fastest‑growing and most profitable in the world. That being said, i can think of at least two things that give me pause.
Firstly, if one of the conditions for a fair and stable market is no unregulated public good, then there may be a time that these intangibles (which ostensibly undergird our economy) become something more akin to electricity— a utility that isnt allowed to be 100% privatized. It would be necessary in order to prevent extreme concentration and tragedy of the commons.
Secondly, as a hardcore Mcluhanist, I am required to mention that “the medium is the message.” Which is to say that the actual IP and brands are much less important than the channels and tech when it comes to human behavior and the shape of the market. If the internet and advent of app-based software determined the last few decades, then maybe the next few are going to look dramatically different as we begin the next wave of AI (or other). It may not necessarily follow the same trends weve been seeing, although I’m not necessarily convinced that its going in a better direction. 🤣
Does that make sense? 🧐 Would love pushback, comments, *cough* collaborations *cough*.
Love this perspective! It's so true how some of these massive shifts go unnoticed. The old 'gentlemans agreements' really shine a light on the ongoing talent war, especially with AI development. Makes you wander how it'll play out.
Totally. Even big changes go relatively unexamined if they happen gradually enough. And I do wonder how the changes will play out—all I know is that it will be different. 🤣
Thanks so much for reading and commenting.
Great stuff, Brad! I suggest one unifying factor across the drivers you've listed: huge increases in the speed of information transfers that have accompanied the digital age. I think it's more of a force multiplier rather than a direct cause. Tied to this, many firms have become much better at exploiting data, whether to optimize product development, improve marketing segmentation, or identify areas of operational efficiency.
Another tidbit I'd be curious to hear your thoughts on: I'd hypothesize that the rise of the digital economy has led to a big rise in the importance of intangible capital, especially software but also IP and brand. Such intangible capital is much more inimitable than other aspects of a market-leading organization, and market concentration should follow in due time if intangible capital is both (a) more important now than it used to be and (b) super important in most industries. Thoughts?
Ayyye! Thanks for reading and making genuinely thoughtful responses.
You make a great point about data—cant believe I left that out, but its a huge force multiplier. Omniscience (not actually, but close enough) is a massive unlock and obviously we have no AI if there wasnt an infathomable amount of information available for these companies to crawl. Fantastic point.
And I think your hypothesis is strong too. As you know, investment in intangibles (software, data, R&D, brands, organizational tactics) has grown several times faster than investment in physical capital, and generally exceeds tangible investment in the big, really advanced economies. Theres a reason software and data companies are among the fastest‑growing and most profitable in the world. That being said, i can think of at least two things that give me pause.
Firstly, if one of the conditions for a fair and stable market is no unregulated public good, then there may be a time that these intangibles (which ostensibly undergird our economy) become something more akin to electricity— a utility that isnt allowed to be 100% privatized. It would be necessary in order to prevent extreme concentration and tragedy of the commons.
Secondly, as a hardcore Mcluhanist, I am required to mention that “the medium is the message.” Which is to say that the actual IP and brands are much less important than the channels and tech when it comes to human behavior and the shape of the market. If the internet and advent of app-based software determined the last few decades, then maybe the next few are going to look dramatically different as we begin the next wave of AI (or other). It may not necessarily follow the same trends weve been seeing, although I’m not necessarily convinced that its going in a better direction. 🤣
Does that make sense? 🧐 Would love pushback, comments, *cough* collaborations *cough*.