If you know about Schumpeter’s Gale, you understand how the winds of technological change and creative destruction are picking up speed. By now you might take this for granted.
What might not be as evident is how profoundly these changes have already affected major, monopolistic industries. Take, for example, transportation. Back in 1937, Mayor Fiorello Laguardia (the guy whose name is on the airport) decreed that taxis shalt be licensed under a medallion system, their numbers artificially restricted to maximize owners’ profits. Hack bureaus around the world are modeled on NYC’s Taxi and Limousine Commission to govern everything from cabs to vans to black cars to medical transport.
Yet right now, without owning a single vehicle, Uber is the world’s largest personal transportation company. Is it any wonder that French cabbies are rioting in the streets and New York has become a legislative battleground for ride sharing?
The retail sector is likewise seeing an upending of familiar order. Since the Hudson’s Bay Company and its offspring set the standard for brick-and-mortar retail, the goal has been to get big, realize economies of scale and pricing power, and keep traffic high. Even well-established giants like Amazon and Walmart follow in these footsteps with programs like Prime and ship-to-store.
Yet in 2016, without a single piece of its own merchandise, Alibaba blew right past Walmart to become the world’s largest retailer.
You get the idea, and bloggers like Tom Goodwin can help you explore it even further. Goodwin’s argument is that disintermediation—the breakdown of familiar pathways between producers and consumers—is altering industries as diverse as lodging, entertainment, transportation, and retail.
And now that technology is causing these industries to converge, their novel combinations – like connecting the entertainment industry’s digital rights management platforms with cryptocurrency – will create exciting profit opportunities for forward-thinking investors.