Shift in value creation.
In the book The Power of Pull that I recently discussed (see here) John Seely Brown mentioned that since the 1960s the value of the assets of the Fortune 500 companies has dropped with 75% and this trend is continuing. Most of these companies are the traditional players in the market who have been around for 50 and even 100 years.
It is not difficult to observe changes that are occurring in the market; the growth trend is moving away from these traditional companies to new ones that have embraced the new digital economy. However, traditional industries have difficulties making the transition, in particular companies in the entertainment, media, publishing, printing and telecom industries. But equally the car, healthcare and energy industries are facing massive changes, just to name a few.
In his book John also states that we are going through a fundamental shift in the source of economic value creation. In the past, economic value creation depended on proprietary knowledge stocks. The challenge for any company was to acquire some proprietary knowledge, rigorously protect it to make sure no one else had access to it, and then as efficiently as possible extract the economic value from this proprietary knowledge stock for as long as possible. As change accelerates and uncertainty grows, though, knowledge stocks depreciate at a more rapid rate. In this kind of environment, the key to economic value creation shifts to the ability to participate in a growing number of diverse knowledge flows to more rapidly refresh our knowledge stocks.
This shift calls into question our most basic assumptions about where and how economic value gets created. Perhaps that is why firms have had such a difficult time responding to the deteriorating performance trends. Even more challenging, responding to this shift requires developing a whole new set of management practices and institutional arrangements.
See also:-
- Global – Investing in the Communications Revolution
- Global – Economic Crisis – Strategic Developments for Comms during the Crisis
- Global – Economic Crisis – Strategic Vision for Comms after the Crisis
- Global – Fast broadband and Trans-sector policies
- Global – Infrastructure – National Broadband Networks (NBN)
- Global – Infrastructure – National Broadband Rollouts Design and Deployment Strategies
- Global – Infrastructure – Next Generation Telecoms
- Global – Internet – Net Neutrality Analysis
- Global – National Broadband & Trans-sector developments in Australia & New Zealand
- Smart Cities, Buildings & Communities
