A striking performance gap is appearing throughout global equity markets. In industry after industry, spanning both the new and the old economies, a small set of companies is creating almost all of the new shareholder value. Simultaneously, the value of their less successful competitors is actually declining, and to an unprecedented degree.

The polarization of winners and underperformers is intensifying. Once, a chief executive officer could claim that the performance of the industry, not the company, was the prime mover for stock prices. But with the advance of globalization and technology, companies whose products or service models have the slightest edge over the competition can quickly exploit that advantage. Investors are scrutinizing companies one by one, screening out those with merely average performance and investing the bulk of their money with the top one or two players in each arena. This phenomenon has created a "winner-takes-all" dynamic in which 5 to 10 percent of the companies in a given industry create all of the shareholder value.

In most industries, the new winners are "atomizers," which focus on narrow industry segments where they can achieve a dominant position, even though they may hold only a small fraction of the assets or...