Entrepreneurs are reshaping capitalism’s basic building block: the company. This revolution is driven by advances in technology, changes in the law and shifts in how the smartest businesses manage talent. The traditional company, a rigid hierarchy that employs many people doing full-time jobs, is becoming less common. Instead, firms are becoming more fluid and focused. The rise of the “on-demand economy” and the “gig economy” is creating a new breed of company with few employees and many short-term contractors. Venture capitalists are pouring money into these start-ups, betting that they can do to professional services what Amazon did to retailing.

Companies are also becoming more virtual. New technologies are making it easier for firms to consist of networks of people and skills spread all over the world. This trend is being reinforced by changes in the law. Governments are making it easier for people to switch from being conventional employees to being self-employed contractors. Companies are increasingly focusing on their core competencies and contracting out everything else.

The rise of the “human cloud” of freelance workers available at a moment’s notice is creating a new class of company. These firms are lean, virtual and hyper-focused on a single area, such as law, consulting or even surgery. They are revolutionising industries by offering high-quality services at lower costs. They are also reshaping the workforce by creating opportunities for people to define their own careers, working when, where and how they want.

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