How Industries Survive Change. If They Do.
November 17, 2008 · Filed Under Business Bytes, Future of Media
For some businesses, the current economic downturn is a bit problematic. For industries already facing fundamental threats — like newspapers and American auto makers — the current economic downturn could accelerate the path to what, it has been said, might be death. The New York Times looks at how industries, like bicycle manufacturers, when faced with a threat of obsolescence, managed to creatively reinvent themselves. What lessons do they provide for today’s struggling industries such as newspapers?
Newspapers have faced challenges before and have adapted — including through efforts at diversification. Can these historical precedents teach newspapers how to defeat the economic forces of technological change once again?
Like previous industries fearful of obsolescence, newspapers can either develop a new product, or find a way to remarket and remonetize the old one. Right now, newspapers are doing a little of both: They’re adapting their product to the Web to attract new audiences, and they’re trying to re-monetize by delivering more targeted advertising.
Meanwhile, we’ve already seen some of the “destruction” half of Joseph Schumpeter’s famous “creative destruction” paradigm, with many newspapers cutting staff and other production costs. Unfortunately for newspapers, historians say, the survivors in previous industries facing major technological challenges were usually individual companies that adapted, rather than an entire industry. So a bigger shakeout may yet come.
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