According to Harvard Business Review, numerous industries have boomed in the past 20 years. The common denominator for this growth is software, the publication says.
More specifically, software is attributed to the growth of concentration in these industries, especially in industries that utilize technology, including retail, education, utilities, wholesale, health care, and others. “Even outside of the tech sector, the employment of more software developers is associated with a greater increase in industry concentration,” Harvard Business Review says. And “academic research has found that rising industry concentration correlates with the patent-intensity of an industry, suggesting ‘that the industries becoming more concentrated are those with faster technological progress.’”
With certain large companies, such as Walmart, software is used strategically in order to “form [a] competitive advantage” over other businesses. For example, some companies use software via the “full-stack” business model, where the software is written and then licensed to publishers. According to Harvard Business Review, the full-stack model is a popular model currently, helping big businesses gain market share.
Software is even more effective when decision makers spread its benefits more broadly, the publication says. For example, software can be used to help rein in tech platforms and their ability to buy up competitors, help software capabilities diffuse throughout an industry’s economy, reform patents, especially if past patents have been abused by trolls, and encourage startups.
Companies that craft their own software, too, have a leg up on becoming – and staying – successful.
“There’s a good chance your success hinges on your ability not just to use but also to build software,” Harvard Business Review says. “[C]onsider what makes your company unique, and how software might further that advantage. Investing in proprietary solutions that complement your strengths might be a good idea, especially for medium and large companies and for growth startups.”