January 22nd, 2008

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Winners of the future invisible competition

The greatest gains in this new world are likely to go to people who are methodical planners or who love the game for its own sake. Some people plot their competitive strategies far in advance. These ­planners—­be they crazy or just highly ­productive—­don’t need anyone breathing down their necks, and indeed they often work best alone or in small groups. Bill Gates is a classic example. Planners’ behavior may manifest itself in competitive forms, but their underlying psychology is often not very rivalrous at all. They are ordering their own realities, usually for their individual psychological reasons, rather than acting out of a desire to trounce the ­competition.

Early risers will also be favored. These people simply enjoy being first in line, or first to use a new idea. They build competitive advantages before anyone else has much chance to react. These are the people who fuel America’s laboratories and high-technology industries, among other sectors. Basketball coaches are scouting younger and younger talent, parents start preparing their kids for the Ivy League in kindergarten, and businesses are starting to worry about global warming that may be decades away. Planning horizons have never been longer. Especially when early risers are ­far­sighted innovators, they often obsess over their own internal creative activities more than they do their rivals. Their delight in winning is more abstract than ­visceral.

Most of all, invisible competition favors people with imagination. It favors the new marketing idea, or the new design (think of Apple), rather than those who focus on squeezing out business costs in order to undercut rivals. Invisible competition favors people who can see a new future and want to get there first. Before Google, who knew that Web searching would be such a big deal—and so profitable

The New Invisible Competitors
by Tyler Cowen