Why the Large Don’t Lead

Big companies in the technology sector have apparently decided to stand against the N.S.A.’s overreach. Once it began to harm or threaten their profits and reputations, that is. They could have moved years ago, though. Why not?

Hollywood calls out against social problems of various sorts, such as the soon-to-screen The Wolf of Wall Street, but they stand fast as ever to their antiquated distribution model.

The big companies don’t take big risks. They fear losing their primacy. This reflects, once again, the exceptionalism bug. The notion that we are the ones, the only ones who can do what we do, we do it better, we do it right. Or else why would we be here? Why aren’t cockroaches the dominant species?

That seems to be at least one explanation for the U.S.’s decline in certain areas. Why we are playing catch-up in healthcare (again, the health insurance industry could have spearheaded reform efforts decades ago, but failed to bother), haven’t upgraded our train systems, and, yes, why our credit cards (see recent news on the Target store breaches) still use half-century-old technology (magnetic strips instead of smart cards).

When things seem to be going so well, we are awfully reluctant to change. What if it makes things worse? What if that worsening leads to systemic decline? What if we have to eat the grandkids just to stay afloat?

Worse, a dominant force may suppress up-and-coming competitors through anti-capitalist activities. It may prevent competitors from gaining a foothold long enough to displace the dominant institutions.

It took Mozilla to change the browser marketplace for the better. Internet Explorer might as well have been the tombstone of the web, and look at the relative vibrancy of the web today! We need these disruptive forces, at least so long as market leaders cannot lead.

We see the same trends in politics. The head of the party, as in O Brother, Where Art Thou?, “How we gonna run reform when we’re the damn incumbent?” We’ve seen a shift in House Majority Leader John Boehner of late. But only because he is facing his political future. He is not sitting pretty, but must make some waves to stay afloat.

We saw the same thing with Microsoft’s browser. Only after they were behind could they actually move ahead. Much of Apple’s innovation comes because of their market position (strong, but not the lead). They have a loyal customer base (not every iThing owner, of course) that supports their vision. But even Apple follows on things where they are leaders, such as removing anti-consumer locks from music.

It’s amazing how twisted our language is. Leader seldom means that. It mostly means the king of the hill, too large to easily be pushed off. But the leaders remain. They go find new hills, they carry scars and blisters.

The renewable energy sector today leads us to a better tomorrow, while the entrenched energy interests (who could make major investments, both speeding the process along and positioning themselves for the next generation) sit atop the hill. Sure, they might buy some wind or solar on their way down. But they seem too scared to lead, just like the rest of the “leaders.”