The Rise of Technology Superstar Companies

According to recent research by economists at Harvard and MIT, the share of sales by superstar companies—which the authors define as the four largest firms in a given industry—has gone up sharply in all the sectors they looked at, from transportation to services to finance. The trend toward superstar firms is accelerating, says Lawrence Katz, a Harvard economist and coauthor of the study. It has become more uniform across industries and developed economies during the past decade or so. These companies' dominance is particularly strong in markets undergoing rapid technological change. Katz says that's probably because of the wide disparity in how well companies take advantage of new advances. In other words, you have to be the smartest company in your field or you might as well not bother.