Nature of the Web Design Industry

Hello Fellow HWG'ers,
I'm been taking some business courses (finishing up my Bachelor's 
degree, actually) and one of those is a Business Strategy course. 
Part of the course is describing various types of industries as 
related to the company's strategy. The description of the Fragmented 
Industry I think fits our field perfectly:

1) Low entry barriers-anyone with a computer, an Internet connection 
and the desire can call themselves a web designer (how good they may 
be is another matter)

2) Technology changing so rapidly and exploding into so many new 
areas and along so many different paths that businesses must 
specialize just to keep up (how many web designers specialize in 
e-commerce, or Perl, or Flash/Shockwave, or graphic design, etc).

3) Absence of large-scale production economies permit small firms to 
compete on an equal cost footing with large firms-it doesn't cost any 
less per site to build a hundred websites than to produce one 
(websites can't really be mass-produced that way anyhow, see next 
point)

4) Buyers require relatively small quantities of customized products 
(websites, anyone?) and since demand for one particular product is 
small, sales volume is not large enough to give production, 
distribution or marketing advantages to a large firm.

5) The market for the industry's product/service is becoming more 
global, so more competitors from foreign countries can get into the 
act (how many web designers here are from outside the US?)

6) Market demand is so large and diverse that it takes a large number 
of firms to accommodate buyer requirements.

7) The industry is so new that firms have not yet gotten large enough 
to command significant market share (how long have even the 
"veterans" on this list been web designers?).

My question is, how long can the web design industry remain 
fragmented? Is it even possible for a few large shops to dominate the 
market, or will there always be room for the small operator? If so, 
how can the small operator continue to compete?

Just some questions about the future of our industry to contemplate 
and comment on.

-- 
Victor Daniel
MacNut Web Design
<http://www.macnutweb.com>
vdaniel(at)pro-usa.net           			

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