When the COVID-19 pandemic emerged last year, few people had heard of BioNTech or Moderna. Now, thanks to their starring roles in being first to develop effective vaccines against the virulent coronavirus, these pharmaceutical startups have become multibillion-dollar companies and household names.

It may be tempting to dismiss them as outliers. After all, how many such upstarts like BioNTech and Moderna are out there shaking up mature industries that include large global companies? Right now, the answer is relatively few. But their numbers are growing fast, from electric-vehicle startups shaking up the automotive industry, to local consumer players winning in their home markets against their global peers, to digital companies taking away fast-growing new profit pools from industrial incumbents. That’s because there is underway a radical disruption of one of the fundamental principles of building competitive advantage: global scale.

Ever since the Industrial Revolution, one rule of business has held true: Size usually won. Big companies triumphed by reaping the benefits of greater efficiency from building scale—of big factories, vast workforces, and presence in many markets. But it is increasingly clear that the links between “big,” “profitable,” and “advantaged” are now weakening, if not yet broken. Growing numbers of “subscale” businesses are competing with their larger rivals, and winning.

What is eroding this more-than-century-old hegemony of scale? In our view, we’re seeing the fragmenting of the global corporate battlefield from an unexpected confluence of three independent factors: New geopolitics fragmenting consensus around “market rules”; growth of advanced digital technologies fragmenting value chains; and the rise of so called deep-tech innovation fueled by venture capital fragmenting the new product development landscape.