The digital world of today is largely concentrated on two poles- the west coast of the USA and the east coast of China. Nine out of the top ten and eighteen of the top twenty tech companies are located in either of these two centers of gravity. These companies are poised for further growth as we move deeper into the digital era. Older industries are getting disrupted by newer technologies in a Schumpeterian cycle. The digital era has led to a winner-takes-all approach where some companies are reaping all the benefits. This may not be suitable to the existing giants for long, as that will breed resentment among the regions left out. Europe for example has seen fewer of its tech startups turn into unicorns, compared to China, in a reversal of the colonial era. And India is proving to be the coveted marketplace, having moved on from being a competition between England and France, to now USA and China. These digital giants are feeding on huge treasure troves of data warehousing, as this information is the fuel for every business. The concentration of wealth is also leading to prosperity within those countries as majority of the tech giants are employing people who reside within the country, even if in some cases they are foreign born. This is more the case in China than in the USA which retains its place as the most attractive talent recruitment hub. The challenge for the Chinese tech giants such as Baidu, Alibaba or Tencent will now be expansion abroad. The US firms are collectively known as AFAMA for Alphabet as Google has rebranded itself as, Facebook, Amazon, Microsoft and Apple. These firms need to be weary about digital walls or protectionist policies that the as-yet-losers in the digital age may put up.

Source:https://www.bcg.com/publications/2017/strategy-globalization-new-digital-world-hegemony-harmony.aspx?linkId=46179907

Uploaded Date:27 February 2018