Incumbents from Walmart to General Motors are fighting back against disrupters
business conference or open any management book and an encounter with some variation of the same message is almost guaranteed: the pace of change in business is accelerating, and no one is safe from disruption. Recent breakthroughs in artificial intelligence have left many corporate Goliaths nervously anticipating David’s sling, fearing that they might meet the same fate as firms such as Kodak and Blockbuster, two giants that were felled by the digital revolution.
We found that only 52 of the 500 were born after 1990, our yardstick for the internet era. That includes Alphabet, Amazon and Meta, but misses Apple and Microsoft, middle-aged tech titans. Merely seven of the 500 were created after Apple unveiled the first iPhone in 2007, while 280 predate America’s entry into the second world war . In fact, the rate at which new corporate behemoths arise has been slowing.
A third explanation for the endurance of America’s incumbents is that their scale creates a momentum of its own around innovation. Joseph Schumpeter, the economist who coined the phrase “creative destruction”, first argued that economic progress was propelled mostly by new entrants, noting in “The Theory of Economic Development”, a book published in 1911, that “in general it is not the owner of stage-coaches who builds railways”.
That division of labour may help explain why many startups are bought by established firms. John Deere’s acquisition in 2017 of Blue River, a startup, gave it the technology behind its clever weed sprayer, which it was then able to sell through its vast network of distributors. Over the past decade 74% of venture-capital “exits” in America were via such acquisitions, according to PitchBook, a data provider .
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