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Opinion | Why Covid-19 will be an extinction event for many incumbent companies

  • Collectively, these new and very different digital ways of working might be thought of as a form of technology
  • Economies of scale no longer confer big businesses any competitive advantage

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Digital businesses, built on cloud services, mobile e-commerce, machine learning and agile methods, have long taken the new breed of digital services and capabilities for granted. Photo: Bloomberg

One of the most striking features of the global business response to Covid-19 has been the resulting rapid adoption of new-breed digital services, such as Zoom and Slack, by born-analogue incumbent businesses.

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Born-digital businesses, built on cloud services, mobile e-commerce, machine learning and agile methods, have long taken such services and capabilities for granted.

Today’s start-ups and scale-ups are weaned on software-as-a-service (SaaS) stack: Zoom and Slack and the couple of hundred other SaaS tools that make them so staggeringly productive and innovative.

By contrast, economies of scale no longer confer big businesses any competitive advantage; incumbents are encumbered rather than empowered by their enormous investments in legacy infrastructure.

Born-digital businesses take remote working for granted, delegate authority and empower people to make decisions in small, agile, multifunctional teams, and strongly support lifelong learning.

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