Laggard industry definition
/What is a Laggard Industry?
A laggard industry is a market niche that is growing at a reduced rate from the general economy or shrinking. There are numerous reasons for this behavior, including the following:
Technological change. The impact of technology can rapidly shrink an industry. For example, the incorporation of lights into smart phones greatly reduced the sale of flashlights.
Shifting of work to a lower-cost country. Costs may be substantially lower in other countries; this typically refers to the shifting of work to countries with lower labor costs. Thus, the garment industry has moved to Central America, Bangladesh, and other locations.
Competition from adjacent niches. Businesses in an adjacent market may steal sales from an industry. For example, online sales from Amazon have ravaged any number of retail stores.
The negative effects of tax laws. Whenever tax laws no longer support an industry, its cost advantage declines. Thus, when tariffs are removed from incoming foreign products, protected industries in the host country inevitably face increased pricing pressure.
A business operating within a laggard industry needs to be especially careful in controlling costs, since its revenues are more likely to be declining.
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Examples of Laggard Industries
Several examples of laggard industries are noted below:
Print newspaper industry. The print newspaper industry has experienced a long-term decline due to the widespread adoption of digital news platforms and social media. Advertising revenue and physical circulation have steadily dropped as readers prefer instant, free online news access. Many newspapers have shut down or shifted to digital-only models, making the print segment a laggard despite overall media growth.
Landline telephone services. Landline telephone services have diminished as consumers and businesses increasingly rely on mobile phones and internet-based communication. Telecom companies have redirected investments toward wireless and broadband technologies, leaving traditional landline infrastructure aging and underutilized. With falling subscriber numbers each year, this segment continues to contract even as the broader telecommunications sector expands.
Coal mining industry. The coal industry has faced ongoing decline due to environmental regulations, the rise of renewable energy, and a global shift toward cleaner fuel sources. Many power plants have transitioned to natural gas, solar, or wind, significantly reducing demand for coal. Despite occasional political support or export demand, the domestic coal sector lags behind the broader energy industry in growth and innovation.