Death of the conglomerate

Millions of jobs may vanish as conglomerates are forced to kill their traditional business model to survive a new technological age and chaotic geopolitics, says the head of Europe’s largest industrial company.

What’s happening: Joe Kaeser, CEO of Siemens, tells Axios that a manufacturing revolution is upping the challenge to the world’s biggest companies, forcing them to focus only on products or services in which they truly excel.

• “Traditional conglomerates have no future.On average, they are average. And today, average means mediocrity, and that’s the target of the 4th industrial revolution,” Kaeser said.
• Technologies like 3D printing mean”you can deliver any item at the cost of mass production.”

The big picture: The new geopolitics of nationalism and protectionism — the “I’m first” movement most loudly voiced by President Trump — are part of what’s making conglomerates obsolete. They can no longer casually operate across dozens of countries under the assumption that everyone will accept such cosmopolitanism.

Siemens, for instance, has divided itself into three distinct divisions based on its perception of its strengths — industrial, health care and power and energy arms. Now it must localize production everywhere it sells, and establish political connections as well, Kaeser said.

• It won’t be possible tobuild complete facilities everywhere. Instead, today’s multinationals will have to persuade countries that it’s okay to establish a digital “brain” in the U.S., for instance, that will instruct advanced plants in individual countries what to manufacture and how.
• “It’s the opposite to what we are used to,” Kaeser said. “A global value chain, where different countries get specialized with different parts.”

Πηγή: axios.com