3 Things You Must Know About The Great Dispersion Economy
Macroeconomic mega-trend that encapsulates the greatest reshuffling of stakeholder value in recent history. Like any such trend, it offers amazing wealth creation opportunities, but also risks.
Industrial revolution, globalization, digitization. When this was happening, it was easy to look at the trees without seeing the forest.
One of the trends we are living in is The Great Dispersion - a macroeconomic mega-trend that encapsulates the greatest reshuffling of stakeholder value in recent history. Like any such trend, it offers amazing wealth creation opportunities, but also risks.
So what's really going on?
1. The distance between producers and consumers is shortening
There are many examples. Just to name a few:
- Uber — distance to the drivers
- Netflix — distance to the movie creators
- Telemedicine — distance to the doctors
- Google — distance to the knowledge
- Udemy — distance to the education
- Amazon — distance to the sellers
- Tesla business model — eliminating dealers
2. As a result, many old distribution channels are dying
Due to the pace of changes, many traditional enterprises cannot adapt fast enough. Old companies are replaced by new ones, created on the basis of the new economy.
I wouldn’t invest in taxi corporations, cinemas, libraries, universities, retail stores.
3. People exit many traditional institutions
It is more than just changing distribution channels and business models. The basic principles of the economy are changing:
- Bitcoin — exit from central banks
- DeFi — exit from centralized finance
- Social media — exit from mass media
- Remote work — exit from work 9–5
- Creator economy — exit from employment
When did it start?
Some may say the pandemic started this process, but if you look at the examples above, we can see that it started much earlier. According to Dr. Scott Galloway the pandemic only “hastened the inevitable".
In fact, already in 1997, in the book "The Death of Distance: How the Communications Revolution Will Change Our Lives" Frances Cairncross described the socio-economic effects of shortening the distance.
What will the future hold?
This is an area of speculation. In my opinion, everything indicates that the creators will be even closer to us in the future. Due to the development of social networks and the instant transfer of information, even more, emphasis will be placed on creating real value for customers. By the same token, word-of-mouth will continue to displace mass sales, personalization, and targeting of products to precisely profiled customers will replace production to the masses.
Technology, including 5G and the spread of the Internet will support the trends of decentralization and the digital economy. New generations brought up on mobile devices and social networks, expect different rules for the functioning of the world. The “command and control” mentality will be replaced by an emphasis on team self-organization.
The pace of changes will force businesses to become more agile than ever before.
As Mark Hunter said: “It’s not about having the right opportunities. It’s about handling the opportunities right”
Interesting times ahead!
- The Death of Distance: How the Communications Revolution Will Change Our Lives by Frances Cairncross
- The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google by