When it comes to building the future through innovation few phenomena get as much attention as the rise of the unicorn. The term Unicorn, which refers to a private company with a valuation of $1 billion USD or higher, first gained popularity in 2013 when there were about forty unicorns. Today there are over 600. Collectively they are worth over $2 trillion, according to a study by LearnBonds.
That in itself is an astounding increase in the number and value of unicorns, which many people see as fueled by the irrational exuberance of another dot-com bubble getting ready to burst. I see something entirely different that speaks to how innovation is fundamentally changing the way we build value as a global economy.
If you're thinking that the unicorn phenomenon is just technological euphoria spurred by high-tech investors, you're incorrect: 560 unicorns are not technology or software companies. They're in Finance, insurance, real estate, transportation retail, and logistics, all driven by the insane increase in the abundance of data--a commodity that knows no borders. According to research from PwC, approximately 40 percent of Chinese unicorn leaders named technology and data as their company's chief competitive advantage.
What Does This Mean For Your Company?
According to the same PwC research, 70% of those Chinese companies have strategies for overseas expansion. In other words, no matter what business you're in, you'll soon be competing with an influx of innovation coming from half a world away.
I'm not at all convinced that's a bad thing. In fact, I think it's a very good thing if we understand and embrace it rather than try to squelch it.
Most people in the U.S. that I've shared this data about unicorns with are initially dumbfounded. They want to believe that the U.S. holds some sort of higher ground when it comes to innovation, but the numbers tell a different story. Few people even know who Ant Financial is, much less that it's the most highly-valued unicorn in the world. New innovations, across nearly all industries, are global, and not confined to Silicon Valey. Whether you're running a corner gas station or a multi-national corporation, you need to look at how innovation is playing out on a global stage in order to create a sustainable business.
We also need to shed our Industrial Age thinking about the role of national borders as barriers to outside innovation. We live in an incredibly interconnected economic ecosystem. You can no more stop innovation from crossing borders than you can stop pandemics or carbon emissions from doing the same.
That's going to be especially true of new technologies like AI, machine learning, and quantum computing. Any country that believes it somehow can contain or fully own these innovations will be left far behind.
Why do I think all of this a very good thing? Because it will up our innovation game. The only way to stay ahead will be to speed up the rate at which we all innovate.
Ultimately, that's the lesson we should be taking away form the rise in unicorns. What we once knew of innovation and the degree to which we treated it as an arms race are artifacts of an older era. We need to let go of those ideas if we're going take a role in building the future.