The Market in Global Times

Stock myBCN - Barcelona Expert
above picture
of Antoni Llena under
Creative Commons License  

The “David and Goliath Economy”

In the New "Global" or "Digital " Paradigm the consumer is invested with a power that humanity has never seen before: there are many cases in which social networks such as Yelp or Foursquare propel the resounding success of a business or, in some cases, even its ruin. This consumer’s power outlines a sort of David and Goliath economic model.

With the popularity of social networking, dissemination of supply and demand for goods is accessible with scarce resources. It is also immediate, which implies that the "opportunism" (in a good sense, that is, the ability to bring the good demanded at the right time) gives unprecedented competitive advantage, giving room to  phenomena such as Uber, where an initially small company with little investment ends up putting in check giants of the Industry.

 

Here are some of the competitive disadvantages of the old giants:

  

In general, they have invested heavily and have a coarse structure to maintain, what takes them to minimize risks and be stingy with their know-how, while creative entrepreneurs whose major goal is to be known, lavishly spread their knowledge. Are largely regulated, having to deal with taxes and some other impositions, while, on the other hand, law regulation still fails to classify new business’ practices aroused under the digital paradigm; and thus many new startup are, as a matter of fact, at least temporarily away from regulations burdens (as in the case of Airbnb who, mediating between supply and demand for accommodation, has moved from its leadership position more traditional hotel companies.

Telecommute: The proliferation of telework

Estimations show that there are about 30 million independent workers in the United States, and that this figure will rise to 40 million by 2019. It is expected that this phenomenon will expand globally to the extent that technology products are more readily available in other countries.  What will the Millennial do in this new situation? Will they develop their creativity and surprise the world with a massive impact with no precedents? Or, conversely, will they succumb to the weight of the old re-aligned giants, generating a catastrophe in the Social Security system?.

 
I would venture to say that the answer to this question will not take many years to come.