Wednesday, November 23, 2005
Four More Paragraphs on Edge Competences
Recently in my comments:
"... AdWords are very plastic, and that's an edge competency.
I wonder what kind of video prosumers are creating. Even though you can buy an HD cam and editing software cheap, it's going to be hard leverage cheap coordinating and have liquidity."
If you're going to make an error in strategy, make a small one. Do not underestimate the power of cheap coordination.
I keep highlighting it for a reason: because I think it is the defining economic discontinuity of today and tomorrow, like cheap information defined the second half of the 20th century, and the rationalization of production and supply defined the first half of the 20th century.
Like each of those discontinuities required their own new dominant strategies - respectively, core competences/disintegration, and vertical integration - so cheap coordination calls for entirely new dominant strategies: edge competences.
The signs are everywhere. Here's the most recent example:
"..."Star Wreck: In the Pirkinning" is a full-length feature in Finnish with English subtitles. It was made by a group of students and other amateur film makers with a bare-bones budget and a few home computers to create elaborate special effects."
The point is simple: edge competences let smart players leverage and internalize things like Star Wreck - and the much broader universe of more deeply disruptive possibilites cheap coordination makes economical - instead of fighting against them. Which is futile, because you can't fight economics; strategy decay in a world of hypercompetition is a very, very bad move.
Isn't the classic hypercompetition reference D'Avenni (1989)? Doesn't that indicate that change is no more profound a decade later just that it is affecting different areas? I don't think competitive intensity has changed since the industrial revolution in aggregate, its only that certain industries are subject to bouts of varying competitive intensity brought on by technological change.
I am arguing cheap coordination is exactly that kind of structural shift in the economy...
If you measure "competition" by number of new entrants (or product lifecycles, etc), I think you will find that it has indeed intensified. You are most likely thinking of industry concentration, which is not the same measure.
In any case, there's an existence proof for you to think about - the number of bloggers/podcasters/2.0 startups/etc.