In sports and business, we love to see the underdog win against the odds. The ragtag sports team beating the silver tails or the small businesses besting the multinationals. These are inspiring stories, but they are outliers.
The trend for industry organisations to fragment into different tribes can see more contest between small and big business, as different groups try to paint other parts of the industry as the enemy.
There is growing polarisation and rivalry within many industries rather than a unified, market-facing external focus. It reveals that many industry institutions are no longer fit for purpose.
A 2021 report by the US National Intelligence Council talks about how the wider trend towards fragmentation is making for greater volatility in global politics, with spill-on effects for economies, industries and businesses.
It predicts greater divisions and increasing fracturing in future.
The prophetic example contemplated in the Council’s last report in 2017, was for a pandemic plunging the world into economic chaos.
The latest report says that the coronavirus pandemic showed the weakness of the world order and that the institutions devised to face past crises are inadequate to coordinate a global response to new challenges like the spread of Covid-19.
The problem of fragmentation and polarisation is made worse by technology. Algorithms, social media and artificial intelligence have replaced expertise in deciding what information spreads most widely, and that has made the public and industries more vulnerable to misinformation.
Organised, vocal groups within fragmented industries can achieve short-term wins for a few. However, the odds of creating breakthrough value for most businesses are much higher when the biggest and smallest players are rowing in the same direction.
Industry institutions with scale and speed are a safer bet for businesses.