Is there still room for small and medium businesses to thrive?
Scott Galloway’s outrage is real.
“Four companies dominate our daily lives unlike any other in human history: Amazon, Apple, Facebook, and Google,” writes Galloway, in Esquire. We love our nifty phones and just-a-click-away services, but these behemoths enjoy unfettered economic domination and hoard riches on a scale not seen since the monopolies of the gilded age.”
He then argues that the only logical solution is to bust up big tech.
I call on people to feel the same outrage for any industry titan on a rampage to (overtly) dominate the market—to rack up as much revenue and market share as they can. In doing this, they are killing off the small and medium business ecosystem.
Bust up big consulting
While tech critics like Galloway are calling for a bust-up of the big tech companies, I want to flag that the Big Four consulting firms (Deloitte, KPMG, PricewaterhouseCoopers and Ernst & Young) and the large advertising consortiums have dominated and crushed the small- and medium-business ecosystem as well. This system of dominance also needs to be busted up.
The big companies are getting bigger in every industry. The Big Four professional-services consultancies dominate the landscape due to their size, reputation and worldwide reach. Their global revenue for 2016 exceeded $127 billion. And they are voraciously buying out businesses, especially agencies. This is not a new phenomenon. But over time, it has made them larger and larger, which is how they justify charging hefty fees.
While I understand big organizations’ appetite to grow bigger, the result is crippling the ecosystem for SMEs.
SMEs are crucial to the economy
According to the Office of the United States Trade Representative, the United States boasts 30 million small-to-medium enterprises, and Canada is home to 1.1 million. Nearly 67% of private sector jobs get created because of efforts like ours. We are told that we are the backbone of the economy. So why are we given such a raw deal?
I founded my company in 2014 and although the journey is a fantastic one, paved with enriching opportunities, growth is a complex challenge. Not only do we have competition from other SMEs in our market space, but national and international business interests are also trying to take a piece of our niche. I know something or two about the power of digital and how it allows an SME to be competitive in any industry and market (Red Dot Digital does business in Canada, the US, Europe, Africa and around the world), but only when there is a clear and concise strategy for success in place. Unfortunately, good strategy can be surprisingly complex to create—and the lack of support for SMEs means there’s little room for error.
Since founding Red Dot Digital, I’ve also had countless conversations with chambers of commerce, membership-based organizations and governmental bodies about this issue. They each end in heart-wrenching disappointment for me, because although their missions say they aim to help all their members, their true focus is on supporting the big and powerful companies that can pay for sponsorship.
Can David survive against too many Goliaths?
When it comes to growth, many SMEs see themselves engaged in a classic David vs. Goliath fight. We, the SMEs, are each trying to establish a niche where we can exist and grow. Larger organizations, in turn, see the SMEs’ efforts as a threat that may erode their own client foundations.
So what can we do? While I agree with Galloway that we need to bust up the big guys, I think there are more solutions to explore. Governments must provide better support and take a real interest in the issues facing SMEs. We, as SMEs, could also use more supportive frameworks for connecting with each other, such as associations and standards of excellence.
In Canada, a risk-averse country that represents a fairly small market, all of this is especially challenging. But at RDD, we believe there is room for both David and Goliath to co-exist if we all make some effort to change the landscape.