4 hours Ago By Howard Lieberman
Editor’s Note: Besides following tech developments and innovation, our author is a Juilliard-trained composer. He has provided a musical composition to accompany your reading: “Innovation Integrity.”https://berkshireedge-images.
s3.amazonaws.com/wp-content/uploads/2025/03/Column-59-Tech-Innovation-Business-Trajectories.
mp3In last week’s column, I talked about businesses’ half-lives and the reasons why businesses don’t last as long as they used to. As I looked further into this trend, I discovered another reason—that businesses often disappear from public view because they are being taken private.Over the past twenty-five years, private equity takeovers of public companies have grown tenfold, transforming what was once a niche financial strategy into a dominant economic force.
According to Bain & Company’s Global Private Equity Report 2024, take-private deals made up just 10 to 20 percent of global buyout value from 2013 to 2019. By 2023, they surged to a record 57 percent. This growth was driven by falling public valuations, retreating IPO markets, and massive private capital reserves.
This is more than a shift in corporate ownership. It is a shift in power. And with that shift come consequences for everyone, not just those inside the boardroom.
A dramatic increase in privatization has occurred in the last 25 years. Howard Lieberman created this image with ChatGPT.The Innovation Equation: Transparency MattersAt first glance, private ownership can look like a win for innovation.
Free from the glare of public markets and quarterly earnings pressures, companies often gain more flexibility to invest in long-term research and development, pursue digital transformation, or develop disruptive technologies. Some private equity firms even seek out undervalued innovators in sectors like AI, biotech, and climate technology.But the picture is more complex and more concerning.
As innovation moves into private hands, public visibility declines. The very forces that once helped shape innovation—transparency, public engagement, and ecosystem feedback—are increasingly absent.Innovation is not just a corporate strategy.
It is humanity’s most advanced tool for adaptation and evolution. When it happens behind closed doors, shielded from scrutiny, its direction becomes harder to understand, influence, or trust.When Transparency Fades, Checks and Balances ErodeTransparency is not just about optics.
It is the mechanism through which checks and balances operate. In public markets, multiple stakeholders, shareholders, regulators, media, and even customers play a role in questioning decisions, spotlighting missteps, and holding leadership accountable.As more innovation occurs within private ownership structures, these feedback loops begin to collapse.
When fewer people can see what is happening, fewer people can question it. The result is not just a dimming of visibility. It is a weakening of accountability.
Decisions that shape the future are increasingly made by a small group of individuals, with little external input or oversight.And that has public consequences, even if the deals themselves remain private.Centralized Control Weakens Innovation IntegrityInnovative companies often begin with a founder’s vision — a compelling idea protected and nurtured through early growth.
But when a company is taken private, that founder’s influence often diminishes, as does the clarity of purpose that initially drove innovation.Private ownership can offer breathing room. It can also enable cost-cutting, financial engineering, or consolidation strategies prioritizing short-term returns over long-term breakthroughs.
When power concentrates and transparency disappears, innovation risks becoming narrowly guided and less accountable, more focused on efficiency than transformation.The growth of an innovative small company evolving into a large enterprise. HowardLieberman created this image with ChatGPT.
A Cautionary Example: Innovation by Design, Not DefaultI spent ten years working at Bose Corporation, where founder Amar Bose made it clear he would never take the company public or accept outside investment. He believed doing so would destroy his freedom to bet the farm on radical ideas. For him, the ability to innovate was not just important; it was the whole point of the company.
He funded bold research, development, and customer education through high margins, not external capital.By retaining control, he ensured that vision—not market pressure—drove strategy. Yet, after his passing, the company has struggled to maintain that same clarity of direction.
This shows how fragile innovation integrity becomes when power shifts away from its original source.Founders evolve substantially along with their company. Howard Lieberman createdthis image with ChatGPT.
The Bigger Picture: Public Consequences of Private DecisionsThe broader trend is clear. More innovation is happening in spaces the public cannot see—in venture-funded labs, private research centers, and firms owned by private equity groups. That does not just reduce transparency.
It reduces our collective ability to shape the future because fewer people understand where innovation is happening, who it benefits, or what values it reflects.Private deals have public consequences. They shape which innovations get built, who owns them, and who ultimately benefits from them.
Without transparency, the natural system of checks and balances erodes, and with it, public trust in how the future is being constructed.The Bigger Picture: Public Consequences of Private DecisionsThe broader trend is clear. More innovation is happening in spaces the public cannot see: in venture-funded labs, private research centers, and firms owned by private equity groups.
That does not just reduce transparency. It reduces our collective ability to shape the future because fewer people understand where innovation is happening, who it benefits, or what values it reflects.Private deals have public consequences.
They shape which innovations get built, who owns them, and who ultimately benefits from them. Without transparency, the natural system of checks and balances erodes, and with it, public trust in how the future is being constructed.The Real Challenge AheadIt is not enough to pursue innovation.
We must protect the integrity of innovation itself. That requires leadership anchored in purpose, structures that promote cultural continuity, and ecosystems that keep innovation visible, responsive, and accountable.Suppose innovation is to remain a public good, not just a private asset.
In that case, we must reckon with what is happening beneath the surface of the economy and what we lose when the mechanisms of oversight disappear along with transparency.Innovation thrives in openness, diversity, and accountability. Without these, we risk less innovation and more invisible power quietly steering the future without us.
.
