Before I lay it all out why corporations are challenged by SMEs and SMEs are challenged by solopreneurs & agencies, I want to first touch upon the culprits behind major social changes we have had over the centuries.
2. Entrepreneurship is about the diffusion of innovation and reallocating capital from the innovators and buyers to the entrepreneurship class that values personal freedoms, smaller governments, and creativity by default.
Today’s people, because of their gadgets, spas, and cheap air tickets live better than the Rothchilds in the 19th century. And this trend will continue to add up to the quality of life and probably eventually lead to a larger social welfare check aka ‘basic income’. But technological progress also today already empowers individuals to master many skills and become more valuable and productive as single individuals vis-a-vis groups that fail to learn. This trend would continue. One human can do what 10 persons tend to do at larger corporations.
The number of freelancers and people who work as solopreneurs also increases year on year. Freelancers are people who don't register a company and manage other people, but offer only their labor. Solopreneurs work mostly alone but can hire freelancers and register companies to hold different types of intellectual property. Both of these categories are on the sharp rise year on year.
The two key factors behind the radical social changes we’ve experienced throughout the decades and centuries before 2020, were therefore caused by innovation first and entrepreneurship second. And this trend will continue as the number of patents increases while economically developing countries emulate the economically developed countries. When we see these clear trends how could anyone predict some major industry changes that are bound to happen in the future? We have to take an advanced representative country that is usually ahead of the curve.
Anyhow, we have clear trends of increased freelancers & solopreneurs + larger innovation + international entrepreneurship that diffuses useful innovation with accelerating pace.
With the rise of AI and other technologies, solopreneurs even today can make marvels. From design to video and website creation with a click of a button they can match the web development departments at Amazon (not tough to beat). Loose alliances of solopreneurs can unroot SMEs that have hundreds of employees only because solopreneurs were more skillful in using advanced technology and increased their productivity.
Whenever solopreneurs would become a threat to an SME, the SME would start decreasing to another solopreneur. So SMEs would shrink or go bust. But right now, the similar is not true with corporations as whenever an SME becomes a threat, or whenever an inventor makes something special, corporations have the resources, legal, and financial leverage to buy out both growing companies and useful patents. This is why the big business in the USA as a percentage of value-added tends to increase these past two decades at the expense of SMEs.
However, as the science of making and growing companies improves, and managing the growth becomes the work of an ever-decreasing number of people, corporations won’t be able to adapt to the challenges, not from SMEs but solopreneurs as solopreneurs would be the next SMEs with nothing to sell but themselves. Corporations won't be able to buy the 'self'.
With raising innovation and the evolution of social benefits towards a basic income, people won’t care so much about the money, but they would want recognition & purpose even more. It’s very much possible that the Linux-type networks and people of the caliber who can single-handedly make an operating system and manage the marketing of a company at once would find it very easy to challenge the larger companies. So, corporates’ power will erode in all the places where the solopreneurs can match them in offering a specific service to their customers with greater agility than anybody else. While SMEs will decrease as there will be a growing number of solopreneurs who can provide a specialized service at scale or the corporations would buy them out.
Right now the order of scale in the extent of political power looks like this below with corporations having far more market and political power than anybody else:
And while corporations would still exist at least during this century and our grandchildren’s lifetimes, it would be evident that the pyramid would flatten with an increasing level of solopreneurs and freelancers the most that won’t depend on the corporate paycheck and can make freer decisions:
Right now in the agency space according to Statista, the profit per shareholder is the same for large multinationals and solopreneurship/small agencies. However, this is a creative industry that requires rare individuals, but this trend will continue to appear in other industries too.
Surely the logistical behemoths that have global supply chains would remain for a very long time, unless we invent the real 3D printing machine, unlike the ones we today celebrate. But the above stands for the following corporations:
Which corporations should stay safe in their scale as we won’t invent an Enterprise-like 3D printing anytime soon:
So yes, solopreneurs will raise along with freelancers in number and social voting powers. SMEs will fall. Large corporates will flatten in their power to shape society. From these developments in terms of allocation of value-creation and capital in society the solopreneuers would benefit the most.
*USA is a good example to show how capitalism will shape society in the years to come. However in its spirit America isn't the right benchmark as its spirit has been compromised since the murders of the first native Americans in the colonialist warfare but also because of its rich slave heritage that was the bedrock for developing the cult of ‘collective labor’ that later transcended into the USA zeal to promote entrepreneurship internationally as a way to create big corporates.
But of course, with their corporations tightly supported by the Pentagon, Hollywood, and the CIA's NGO complex, the USA is one of its kind, having so relatively few people and so much accumulated wealth. While we take the USA as an example from the 'future' that would come by innovation, and not by brainwashing and exploitation, we have to have in mind that the SPIRIT of the USA is backward, despite its economy and metrics being advanced. Whatever happens now in the USA will happen similarly in other countries only with a kinder nature, and without the colonial / imperialistic spirit.