01/31/2023

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Large corporations will topple if they fail to adopt web3 tech

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Large corporations will topple if they fail to adopt web3 tech

What do Clorox, Twitter, Equifax, Macy’s, ViacomCBS, Nordstrom, and Southwest Airlines have in common? They’ve all, at one point or another, dropped out of the Standard & Poor’s 500 index.

A common misconception plaguing the world of entrepreneurship is that the only metric of success one should care about is a swift and painless rise to the top. However, the contradiction at hand is that we all know the largest corporations of today are not the same as yesterday’s ones, and won’t be the ones of tomorrow: staying put right at the top, so to speak, is arguably just as important as getting there.

A 2019 McKinsey study found that the lifespan of companies at the top of their game is rapidly decreasing at lightning speed. In 1958, the organisations listed in the S&P 500 had been on the list for an average of 61 years, but the figure dropped to 35 years by the late 1970s and is now a meagre 18 years. “The speed of disruption is accelerating,” McKinsey reports, adding to their gloomy prediction that in 2027, 75% of the companies currently quoted on the S&P 500 will have disappeared.

This is because organic growth “continues to elude long-standing companies,” and younger companies are outperforming their more established counterparts ––let’s just look at the fact that “companies in the S&P Global 1200 that were founded within the past 30 years generated four times as much shareholder value as longer-standing companies,” and the picture will become a lot clearer.

One key factor impacting the stunted growth of companies we know and love today is their inability to renew themselves and stand strong against the pressure of younger, more innovative challengers. These are digital natives, disruptive powerhouses, fast-moving unicorns and tech-enabled startups with no shortage of creative inspiration.

If the trend continues on its current trajectory, many of the world’s largest businesses will topple unless they embrace innovative technologies ––right now, web3 related ones are in focus.

Web3 technologies such as decentralised blockchains provide new business opportunities, improve transparency and security where data is not centralised, and allow firms to tap into the future of tokenization. Estimated to be worth $13 trillion and have up to five billion users by 2030, the metaverse is part of a groundbreaking vision for a web3 future powered by a combination of AI, VR, machine learning, blockchain, 5G and much more: the business opportunities, should large corporations wish to use them to their advantage instead of ignoring them, abound all around us.

Companies can use this technology to leverage new decentralised business models and platforms, along with financial models such as tokenized asset classes. It can seem quite overwhelming, at least at first, but it’s essential that businesses understand what web3 is all about, as they need to be the ones leading the way towards it. Google’s Alphabet, currently one of the biggest names publicly exploring the potential of web3 technologies, is a good example of who’s breaking new ground, along with Amazon, Netflix, Meta and Meta’s Instagram, Apple, Sony, and so many more.

If large corporations fail to join the web3 revolution, they will likely end up being overrun by their tech-savvy competitors, to whom the D-gen (decentralised generation) will be more than happy to flock to. The question is, why not prevent that from happening in the first place? Why not at least try to approach web3 tech, and make use of it while the playing field is still somewhat levelled?

To anyone “waiting for the perfect moment” to jump on the web3 bandwagon, I’ll only say this: if you wait for everyone else to go first, you’ll always be last. And if you still believe there’s a perfect moment, you might have missed it already.

By Lone Fønss Schrøder, Concordium’s CEO

Source: www.cityam.com

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