Alain Closier
Mar 4, 2025
Q: Is the acceleration of innovation the primary cause of a rise in business bankruptcies?
Monthly Commentary
Q&A with Alain Closier
Alain Closier,
Senior Advisor
Paris, France, Europe
Question:
The Acceleration of Innovation and the Rise in Business Bankruptcies:
Challenges and Opportunities
Is the acceleration of innovation the primary cause?
How can we best understand this evolution, and beyond that,
are there paradoxical opportunities to seize?
Answer:
Business bankruptcies in the United States and Europe have risen significantly in recent years, with new business creation failing to fully compensate for these closures. This trend is expected to persist, not only in the West but also in Asia, as economic and technological shifts continue to reshape global markets.
Figure 1*:
*Note: Nonbusiness bankruptcies not included.
Figure 2*:
*Note: Nonbusiness bankruptcies not included.
Figure 3:
Figure 4:
While factors such as economic downturns, inflation, and rising interest rates play a role, the rapid acceleration of innovation is becoming an increasingly prominent cause of corporate failures. The transformative impact of artificial intelligence, automation, and digitalization is disrupting entire industries. Furthermore, evolving consumer behaviors—such as shifts in work organization, the rise of e-commerce, and changes in lifestyle—are further accelerating business model transformations.
The concept of creative destruction, as introduced by economist Joseph Schumpeter in the 1940s, aptly describes this phenomenon: established businesses and jobs disappear, but new industries and opportunities emerge in their place. Historically, technological revolutions—from the steam engine to the internet—have prompted similar economic realignments, but today’s disruption is distinct in its pace and global reach.
Responding to the Wave of Bankruptcies
While creative destruction fosters innovation and renewal, it also presents challenges that require careful analysis and strategic responses.
I. Conducting a Strategic Analysis of a Struggling Company
To determine the best course of action, it is essential to identify the root causes of a company’s bankruptcy:
Industry Disruption: Is the sector undergoing transformation due to new technologies?
Macroeconomic Challenges: Is demand declining due to broader economic factors?
Internal Competitiveness: Are operational inefficiencies, outdated business models, or increased competition at play?
Understanding these dynamics will shape the approach to asset valuation and recovery.
II. Maximizing the Value of a Bankrupt Company’s Assets
Companies facing bankruptcy often possess valuable resources, and strategic asset management can yield significant opportunities:
Asset Identification & Segmentation – Categorizing tangible (e.g., real estate, equipment), intangible (e.g., patents, brand value), and financial assets (e.g., receivables, investments).
Strategic Disposal Approaches – Depending on the bankruptcy cause, the right asset disposal strategy should be chosen, whether through auctions, targeted sales, or business restructuring.
Expert Valuation & Recovery Planning – Engaging external specialists to assess and maximize the recovery of high-value assets, particularly intellectual property and data assets.
Opportunities Amidst Disruption
Beyond risk mitigation, the ongoing wave of bankruptcies presents opportunities for entrepreneurs, investors, and policymakers:
Investment & Mergers and Acquisitions (M&A): Distressed assets can provide entry points for investors and businesses seeking undervalued companies, technology, or talent.
Workforce Reskilling & Adaptation: The shift in industries necessitates workforce transformation, creating opportunities in education, training, and upskilling to align with new economic demands.
Policy & Regulatory Adaptation: Governments and institutions can play a key role in facilitating smoother transitions by implementing frameworks for retraining displaced workers, supporting innovation ecosystems, and fostering adaptive financial policies.
Conclusion
As Schumpeter’s theory of creative destruction suggests, economic evolution is an ongoing process. While the acceleration of innovation presents disruption and challenges, it also unlocks opportunities for strategic investment, workforce evolution, and policy innovation. Entrepreneurs, investors, and employees alike must proactively adapt to this shifting landscape to harness the potential that change brings.
About Sanli Pastore & Hill
With four locations in the states and three abroad, Sanli Pastore & Hill is staffed with seasoned providers of business valuations for merger and acquisition advisory services and for shareholder buy-outs, transaction advisory services, financial opinions, and fairness and solvency opinions. Our litigation support and expert witness testimony for economic and financial issues, valuations, opinions and damage calculations covers a wide span of complex issues such as estate planning, shareholder disputes, and marital dissolutions.
Alain Closier, Senior Advisor
Paris, France, Europe
Alain Closier is a former member of the General Management Committee of the Société Générale group. With more than 35 years of experience in international banking and finance, he is, and has always been, passionate about creating innovative activities.
Alain Closier is a graduate of the National School of Statistics and Economic Administration (ENSAE) and holds a post-graduate degree in Economics from Panthéon-Sorbonne University, in Paris. He began his career as an economist, before joining the International Treasury department of Société Générale.
In the 90s, Alain was responsible for the international development of FIMAT. Originally only a French brokerage company, FIMAT has become in just a few years an international leader specializing in brokerage on derivative stock markets with a presence in more than 25 countries.
Alain Closier was also the creator of FIMATEX, a precursor of online brokers. In 2000, FIMATEX was one of the largest IPOs in Paris in the internet sector. After several mergers and acquisitions, FIMATEX became Boursorama, today one of the French leaders in online banking.
Alain Closier's work has been rewarded on several occasions by international financial institutions. As Director of Société Générale Securities Services (SGSS), he was elected “European Personality of the Year in Asset Servicing” in 2010 by Funds Europe magazine. Its teams were recognized both for their expertise in emerging markets and for their presence on a European scale.
Overseeing the development of the bank's venture capital activities in Silicon Valley during the 2000s, Alain Closier acquired in-depth knowledge of the problems encountered by start-ups, both in the United States and in Europe.
If you would like to submit a question for Alain Closier, email us at info@sphvalue.com.