It’s a red flag for me when someone makes an argument that makes little or no effort to deal with counterevidence. I never see news articles about the growing rise and risk of corporate concentration that contend with analyses suggesting concerns are overblown. The same goes for the way Big Tech is supposedly squelching competition and depressing innovation. And it’s also weird that claims the US economy is growing less competitive ignore evidence that there’s more creative destruction than ever, at least by some measures (though not by others). Check out the following chart from “Strategy When Creative Destruction Accelerates,” a 2016 analysis by Vijay Govindarajan  and Anup Srivastava:

From the paper:

Life is short. That’s never been more true for corporations today. An analysis of all 29,688 firms that listed from 1960 through 2009, divided into 10-year cohorts, reveals that newly listed firms in recent cohorts fail more frequently than did those in older ones. Creative destruction is accelerating because there is a fundamental shift in the American economy. The pre-1970 firms tended to be heavily invested in physical infrastructure, such as factories and inventories. Later cohorts have relied increasingly on intangible assets, such as databases, proprietary algorithms, and expert workers. This transformation is a double-edged sword. The good news is that newer firms are more nimble. The bad news for these firms is that their days are numbered. That is, unless they continuously innovate. The newer firms are grounded in novel business models, like digital services, that can be launched and distributed quickly. This gives them an advantage over production firms. “Idea” companies don’t require an expensive infrastructure of factories, warehouses, and suppliers to operate. They don’t need an extensive distribution network to get their product to market. They don’t need elaborate marketing campaigns—news of successful products spreads rapidly through blogs and social networks. Winners emerge quickly and reap rewards disproportionately larger than the initial investments. …

No company—whether its products are tangible or intangible, is a century or a year old—has the luxury of basking in yesterday’s success. However, in this information age, that success can be appropriated too swiftly by a newer company with a better idea. The key to competitive advantage 3 is ensuring innovation is an integral part of business strategy, a nonstop cycle of mining, testing, and executing. Equally important is the timely pullback of organizational resources from yesterday’s promising ideas that now appear less promising and their continual redeployment towards tomorrow’s new ideas. In other words, to survive you must build a better mousetrap each day—or at least an app for one.

Of course maybe all that has changed since 2009, and I would love to see updated numbers. But this research is certainly worth mentioning if you are making the concentration/stagnation case. (Thanks for the pointer to this study via a tweet from Josh Brown and a blog post from Cullen Roche.) Nor do I see reference to this 2016 Innosight study that “found the 33-year average tenure of companies on the S&P 500 in 1964 narrowed to 24 years by 2016 and is forecast to shrink to just 12 years by 2027.” And there wasn’t a whole lot of play on this recent news: “US Leapfrogs Singapore, Hong Kong to Win World’s Most Competitive Economy,” though I grant you this is using “competitive” a bit differently.