Introduction - Digitalization – from the internet to artificial intelligence
How digital technologies have changed businesses, customers, markets and value creation
Digitalization is one of the biggest economic, technological and societal changes in recent decades. Computers, the internet, the World Wide Web, search engines, e-commerce, smartphones, cloud services, digital platforms, data and artificial intelligence have not only given us new tools. They have gradually changed how people communicate, how customers find and evaluate products and services, how businesses organize themselves, how markets function and how value is created.
This development has not happened as a single technological shift either. It has come in waves. The Internet made it possible to connect computers and people over great distances. The World Wide Web made information available through a common interface. Search engines made enormous amounts of information searchable. E-commerce moved increasingly large parts of the purchasing process to digital channels. Social media gave people new opportunities to publish, share and influence. The smartphone made the digital world continuously accessible. Cloud services, data and digital platforms made it possible to build and scale services in completely new ways. Artificial intelligence now represents a new shift, where digital systems not only store, distribute and process information, but can also analyse, generate, recommend and increasingly perform actions.
The history of digitalization is therefore not just the story of technology. It is about how technology has changed the relationship between business, customer and market.
From technology to profession
As digital technologies were adopted, new disciplines, methods and strategic perspectives also emerged. Internet marketing developed when businesses began to use the web as a marketing and communication channel. E-commerce emerged when information, purchasing processes and transactions could be carried out digitally. Information architecture, usability and later User Experience, UX, developed because digital services had to be organized and designed so that people could actually understand and use them.
Search engines created new disciplines around visibility and search engine optimization. The smartphone contributed to Mobile First and responsive design. Several parallel sales channels evolved from multichannel to omnichannel. Customer data, CRM, analytics and personalization made the customer relationship increasingly data-driven. Cloud services, APIs and digital platforms made it possible to connect services, businesses and ecosystems in ways that would previously have been technically and economically far more difficult.
At the same time, new economic mechanisms emerged. Digital goods could be distributed at very low marginal costs. Physical limitations on assortment and distribution were reduced, which is among other things behind the phenomenon that later became known as The Long Tail . Network effects could make digital platforms more valuable as more people and businesses joined them. Data could be used to improve services, recommendations, and decisions.
Digitalization thus gradually became something far more comprehensive than IT.
The customer gained more power
One of the most important consequences of digitalization has been the change in the relationship between business and customer. Before the internet, businesses had much greater control over information about their own products, prices, and alternatives. Customers often had limited opportunities to research the market before making a decision.
The Internet began to change this balance of power. The World Wide Web made information accessible. Search engines made it findable. E-commerce made geographically distant options accessible. Price comparisons made differences visible. Customer reviews made other people's experiences accessible. Social media gave the customer a public voice. The smartphone made information available almost wherever the customer was.
The customer could search, compare, research, comment, recommend and criticize in ways that were previously not possible on the same scale.
This development helped customer focus gradually move from being an ideal in marketing and service to becoming a strategic issue for the entire business. A poor digital service could no longer be considered an isolated technological problem. It could affect customer satisfaction, reputation, sales, efficiency and competitiveness.
Digitalization thus helped to force a more strategic customer focus.
From website to digital business
In the early years of the commercial web, it was natural to ask how businesses would establish themselves on the internet. Many of the first projects were about websites, publishing, and digital communications. Over time, the questions grew bigger.
How should the business sell digitally? How should the customer find the products? How should information be organized? How should the services work on the mobile phone? How should customer data be used? How should digital and physical channels work together? How should the organization work when digital services have to be continuously developed?
The development can therefore also be described as a movement from website to digital business .
Digital technology gradually moved into the actual value creation. For banks, digitalization eventually became about much more than a website; payment, advice, self-service and large parts of the customer relationship became digital. In the travel industry, search, ordering, payment, check-in and customer communication were digitalized. In retail, the online store was connected with warehouse, logistics, payment, marketing, customer data and physical stores. In the public sector, paper-based processes were replaced by digital forms, self-service solutions and gradually more coherent digital services.
The line between business and digital business became increasingly difficult to draw.
San Francisco and the encounter with digital development
For me, digitalization is not just a field I have read about in retrospect. I have followed parts of the development while it was happening.
Through work with digital services and studies in eMarketing, web design, innovation and commercialization, I had the opportunity to work early on with issues that would later become central to the digitalization of businesses. The studies provided different approaches to the same development: how the internet changed marketing and communication, how digital interfaces had to be designed for people, and how technology could be used to develop new products, services and business models.
Study trips and professional stays in San Francisco and Silicon Valley made this development particularly concrete. The area was a natural place to study how technology, entrepreneurship, capital, research, design and new business models could meet in the same innovation ecosystem. Many of the companies that came to shape the digital development had their origins in or strong connections to this environment.
What was interesting wasn't just the individual technologies or companies. It was the pace of change and how multiple disciplines began to merge into each other. Marketing was connected to technology and data. Design was connected to user insights. Commerce was connected to digital interfaces and logistics. Innovation was connected to new business models and digital platforms. The customer increasingly became the starting point for how digital services had to be developed.
In retrospect, it is possible to see these experiences as part of a much larger development. Concepts, technologies and methods that at different times could appear as separate disciplines eventually became building blocks of what we today refer to as digitization and digital transformation.
Digitalization is about value creation
Technology does not automatically have value just because it is new. Value arises when technology is used to solve problems, improve services, reduce costs, make knowledge available, create new products, improve customer experiences, or enable activities to be organized in new ways.
Therefore, digitalization must also be understood as a question of value creation.
Sometimes value creation comes through efficiency. A digital self-service solution can reduce the need for manual work while giving the customer access to the service when it suits them. Other times, technology makes something completely new possible. The smartphone’s combination of internet, GPS, camera, payment and apps created the foundation for services and business models that would have been difficult to realize with previous technology.
Digitalization can also shift work and costs. When the customer books the trip themselves, registers information, carries out the bank transaction or scans the goods, the work does not necessarily disappear. Some of it is shifted from the company's employees to the customer and the digital system. Therefore, digitalization must be considered more broadly than through pure cost savings.
The question is not just how much technology the business has adopted, but what value the digital solution actually creates, for whom and at what cost.
Digitalization is also organizational development
As digital services became an increasingly important part of the business, it became clear that digitalization could not be left to the IT department alone. Technology affected strategy, organization, expertise, work processes, management, marketing, sales, customer service and product development.
This is an important part of the transition from digitization of individual processes to digital transformation.
Businesses didn't just have to implement new systems. They had to develop the ability to work continuously with digital products and services. Multidisciplinary teams, agile working methods, product orientation, experimentation, analysis and continuous improvement therefore became important parts of digital development.
Digital transformation, in this sense, is as much about people and organizations as it is about technology.
From Digital First to AI First
Artificial intelligence represents the latest major shift in this development. Previous digital waves made information accessible, searchable, mobile, and measurable. Artificial intelligence increasingly makes it possible to process information, find patterns, generate content, conduct conversations, make recommendations, and automate knowledge work.
This could in turn change how people use digital services.
The search engine taught us how to formulate searches. The smartphone made apps a central gateway to digital services. Generative artificial intelligence makes natural language a new interface. Digital agents can eventually go even further by not only finding information, but also performing actions on behalf of the user.
This raises new questions for businesses. What happens when the customer doesn't necessarily visit the website to find information? How should products and services be described when both humans and AI systems are to understand them? How are search, e-commerce, marketing, UX and customer service affected when artificial intelligence becomes a new intermediary between the business and the customer?
The history of digitalization is therefore far from over.
About this series
This series follows the evolution of digitalization from early computers and the World Wide Web to artificial intelligence and digital agents. The goal is not to create a chronological catalog of technologies, but to examine the most important professional shifts and what they have meant for people, customers, businesses, markets, and value creation.
Along the way, we encounter research, key technical concepts, and companies such as Amazon, Apple, Google, Microsoft, and other businesses that have contributed to or illustrate important parts of the development. Norwegian examples are used where they can document the same changes in a Norwegian context.
The series must also be read in conjunction with the other disciplines at The Invisible Capital . Digitalization affects the customer, creates new opportunities for innovation and changes how value is created. Therefore, the series will connect to in-depth studies on the customer, innovation, value creation, artificial intelligence, e-commerce and digital classics where these disciplines overlap.
Contents – Digitization from A–Z
Digitization, digitalization and digital transformation. We establish the terms and examine what digitization actually entails.
How the computer, the internet and the web created the infrastructure for digital development and made information digitally and globally accessible.
From the first websites to digital services, self-service and new ways of organizing information and connecting with users.
How the internet changed marketing through websites, email, digital advertising, CRM, measurement and eventually increasingly data-driven communication.
From the first online stores to digital marketplaces, new business models and changing economic mechanisms. Here, the development is linked to, among other things, The Long Tail .
How search engines changed the power of information, and how Google, SEO, SEM, product search and customer reviews affected the competition for customer attention.
How Human–Computer Interaction, usability, information architecture and User Experience developed into central areas of expertise for digital products and services.
How social media, user-generated content, customer reviews and digital networks changed communication between people, businesses and brands.
How the smartphone, responsive design, apps, location services and mobile payments made the mobile a central starting point for digital service development.
How businesses moved from separate channels to the ambition of continuous customer journeys across online, mobile, customer service and physical touchpoints.
How SaaS, cloud services, APIs, analytics, personalization, and platform economics changed infrastructure and made new digital ecosystems possible.
How transparency, search, comparison, customer reviews, increased competition and ever-higher expectations helped shift power towards the customer and make customer orientation a strategic issue.
When digitalization moves from individual technology projects to strategy, organization, culture, expertise, agile working methods and continuous product development.
How generative artificial intelligence, AI Search and digital agents can represent the next phase in digitalization, and what consequences it can have for the business, the customer and value creation.
From technology to people
When we look back at the history of digitalization, it is easy to become fascinated by technology. The computer, the internet, the web, the search engine, the smartphone, the cloud, and artificial intelligence are all technological breakthroughs.
But technology is not the whole story.
Behind each of these shifts we find people developing new solutions, businesses trying to understand new opportunities, employees having to learn new ways of working, and customers changing their behavior and expectations.
Therefore, this series is ultimately not about technology alone.
It is about how people use technology to change the way we work, shop, communicate, organize businesses and create value.
Academic background and further reading
This series also builds on my own professional journey through the Web Design study , the eMarketing study , Innovation and Commercialization and professional seminars in San Francisco and Oxford . Here you will find the background, professional environments and experiences that have followed the development from the early years of the web to today's digitalization.
Recommended literature
The literature presented here spans several disciplines and periods. The books provide perspectives on digitalization, innovation and strategy , and show how technology, markets, organizations and people have been understood and developed over time. Some of the works are classics, others represent newer academic perspectives, but together they provide a useful basis for further in-depth study of the topics we work with at The Invisible Capital .
The Long Tail: Why the Future of Business Is Selling Less of More
Author(s): Chris Anderson
Short review
The Long Tail is one of the most influential books on how the internet has transformed commerce, marketing, and consumer behavior. Chris Anderson introduces the theory of the “Long Tail,” which explains how digital markets enable significant value creation through a large number of niche products, rather than relying on a few bestsellers.
The book shows how digital distribution, low inventory costs, search engines, and intelligent recommendation systems have made it profitable to offer an almost unlimited product range. Where traditional stores were limited by physical shelf space, online stores can offer millions of products and let customers find exactly what they are looking for.
Chris Anderson illustrates the theory with examples from Amazon, Netflix, Google, and the digital music industry, showing how the internet has changed the rules of competition for businesses around the world. Many of the insights have since become even more relevant through artificial intelligence, personalization, and modern search technology.
The authors take the reader through the entire process – from planning and organizing to publishing, managing and continuously improving content on websites and digital services. Although technology has evolved since the book was published, the principles of quality, relevance, management and long-term content work are at least as relevant in an era where search engines and artificial intelligence assess the credibility and usefulness of content.
Why we recommend the book
At The Invisible Capital, we consider The Long Tail to be one of the most important books in e-commerce, digitalization, and modern value creation.
The book explains why customers no longer just buy the most popular products, but increasingly find value in specialized products and services that meet individual needs. This insight has had enormous impact on the development of online stores, digital marketplaces, search engine optimization (SEO), information architecture, and content strategy.
Today we see that the theory also fits very well into the development of artificial intelligence. AI helps people discover relevant content, products and knowledge that were previously difficult to find. This has given the Long Tail principle a new dimension, where well-structured content and high professional quality are increasingly important for visibility, trust and value creation.
This is a book we believe everyone who works with e-commerce, digital marketing, customer experience, innovation, digital strategy or artificial intelligence should read.
Content Strategy for the Web (2nd Edition)
Author/authors: Kristina Halvorson and Melissa Rach
Short review
How do you create content that actually helps people – and at the same time supports your business goals? Content Strategy for the Web is considered one of the most influential books in the field of content strategy and digital communications. The book shows how good content does not arise by chance, but through a deliberate strategy where user needs, the organization's goals, structure, work processes and management are closely linked.
The authors take the reader through the entire process – from planning and organizing to publishing, managing and continuously improving content on websites and digital services. Although technology has evolved since the book was published, the principles of quality, relevance, management and long-term content work are at least as relevant in an era where search engines and artificial intelligence assess the credibility and usefulness of content.
Why we recommend the book
At The Invisible Capital, we believe that good content is one of the most important forms of invisible value creation. A website is far more than design and technology – it is the content that builds trust, creates great customer experiences and helps people find the answers they are looking for.
This book is perfect for leaders, communications consultants, content producers, web editors, UX designers, and anyone working with digital services. It shows why a clear content strategy leads to better user experiences, more effective interactions, and stronger digital results over time.
In an era where artificial intelligence is increasingly important in how information is discovered, understood, and communicated, this book is more relevant than ever. It reminds us that technology alone never creates value – it is good, structured, and relevant content that makes the difference.
Don't Make Me Think
Author: Steve Krug
Short review
Don't Make Me Think is one of the world's most influential books on usability and web design. Since its first edition in 2000, the book has helped designers, developers, content producers, and managers understand a simple but powerful principle: Good digital services should be intuitive. The user should be able to complete their task without having to stop and think about how the website works.
Why we recommend the book
This is one of the books that has had the greatest impact on my own work with digital services. Over the years – from SAS and the Norwegian Opera & Ballet to working on Bærum Municipality’s website – the principles in this book have been an important reminder that technology is never an end in itself. The goal is to make everyday life easier for the people who use the services. Despite the fact that the book was published many years ago, the message is just as relevant today.
Internet Marketing & eCommerce
Authors: Ward Hanson and Kirthi Kalyanam
Short review
Internet Marketing & eCommerce provides a thorough introduction to how the internet has changed marketing, commerce, and business development. The book combines theory and practical examples in digital marketing, e-commerce, customer behavior, value creation, and digital business models. Although written at a time when the internet was still in its infancy, many of the fundamental principles are still highly relevant.
Why we recommend the book
This book was an important part of my own learning journey in digital marketing and e-commerce. It helped build my understanding of how technology, customer experiences and business strategy are interconnected – an insight that later became very important in my work with SAS, the Norwegian Opera & Ballet, Bærum Municipality and eventually the project The Invisible Capital. Many of the ideas about customer value, digitalization and innovation presented on the website have their roots in the knowledge this book conveys.
The Innovator's Solution: Creating and Sustaining Successful Growth
Authors: Clayton M. Christensen and Michael E. Raynor
Short review
In this sequel to The Innovator's Dilemma, Clayton Christensen shows how businesses can translate innovation theory into practical strategy. The book explains how companies can identify new growth opportunities, develop disruptive innovations, and build organizations that thrive in rapidly changing markets.
Why we recommend the book
While The Innovator's Dilemma explains why established businesses are often challenged, The Innovator's Solution provides concrete advice on how to meet the challenges. The book is therefore a natural next step for anyone who wants to understand innovation, strategy and long-term value creation.
The Innovator's DNA: Mastering the Five Skills of Disruptive Innovators
Authors: Jeff Dyer, Hal Gregersen and Clayton M. Christensen
Short review
What characterizes people who create groundbreaking innovations? The authors identify five key skills – observation, questioning, experimentation, networking and association – that are common to the world's most innovative leaders and entrepreneurs.
Why we recommend the book
This book shifts the focus from organizations to the people behind innovation. It shows that creativity and innovation can be developed through deliberate training and experience. The perspectives align well with the philosophy behind Invisible Capital, where human competence and curiosity are the most important drivers of development.
Competing Against Luck: The Story of Innovation and Customer Choice
Authors: Clayton M. Christensen, Taddy Hall, Karen Dillon and David S. Duncan
Short review
In this book, Clayton Christensen further develops the theory of Jobs to Be Done – the idea that customers do not primarily buy products, but "hire" them to solve specific needs. Through practical examples, the authors show how businesses can develop products and services that address customers' real-world challenges.
Why we recommend the book
For anyone working in customer experience, service design, and innovation, this is one of the most insightful books ever written. It reminds us that value creation always starts with understanding the people we are developing solutions for – a fundamental principle of Invisible Capital.
The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail
Author: Clayton M. Christensen
Short review
The Innovator's Dilemma is considered one of the most influential books on innovation and technological change. Clayton M. Christensen introduces the theory of disruptive innovation and explains why even the most successful businesses can fail when new technologies and business models challenge established markets. Through a series of examples, he shows how companies often focus on today's customers and incremental improvements, while overlooking innovations that later change entire industries.
Why we recommend the book
This is one of the books that has had the greatest impact on modern innovation thinking. When I first read it, it gave me a whole new perspective on why some businesses succeed in transformation, while others lag behind – even when they are well led. The insight has been an important part of my own understanding of digitalization, innovation and change management, and many of the reflections in The Invisible Capital build on the ideas Clayton Christensen presents in this classic. The book is as relevant today, in the face of artificial intelligence and digital transformation, as it was when it was published.
Open Innovation: The New Imperative for Creating and Profiting from Technology
Author: Henry Chesbrough
Short review
Henry Chesbrough introduced the concept of Open Innovation and changed the way many businesses think about research and development. He shows how companies can create more innovation through collaboration with customers, universities, start-ups, suppliers and other external partners.
Why we recommend the book
Open Innovation has had a major influence on modern innovation thinking and was also an important topic during the seminars in Oxford and San Francisco. The book shows why future value creation occurs in the interaction between people, businesses and knowledge environments – not within closed organizations alone.
Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant
Authors: W. Chan Kim and Renée Mauborgne
Short review
Blue Ocean Strategy challenges businesses to shift their focus away from fierce competition and instead create new markets with little or no competition. The authors present strategies and models that help organizations develop innovative products, services, and business models.
Why we recommend the book
This book has inspired leaders around the world to rethink strategy and innovation. Instead of competing for the same customers, it shows how businesses can create new value through creativity and differentiation. The perspectives align very well with the themes of innovation, digitalization, and long-term value creation in Invisible Capital.
Outside Innovation: How Your Customers Will Co-Design Your Company's Future
Authors: Patricia B. Seybold
Short review
Patricia Seybold shows how businesses can create better products and services by actively involving customers in the innovation process. The book describes how dialogue, co-creation and close collaboration with users can provide better solutions and stronger competitiveness.
Why we recommend the book
Customers often hold the most important insights into how products and services can be improved. This book emphasizes the importance of listening, involving, and learning from users – a perspective that is echoed in many of the articles on The Invisible Capital. Innovation rarely happens alone; it is created in the interaction between people.
Blown to Bits: How the New Economics of Information Transforms Strategy
Authors: Philip Evans and Thomas S. Wurster
Short review
This book analyzes how digital information is changing competitive conditions, markets, and business strategies. The authors explain how the internet is disrupting established structures and creating new opportunities for businesses that are able to think differently.
Why we recommend the book
Although written early in the internet revolution, the book describes many of the developments that still characterize business today. It provides valuable perspective on how digitalization affects value chains, competition, and innovation – themes that are central to Invisible Capital.
Wikinomics: How Mass Collaboration Changes Everything
Authors: Don Tapscott and Anthony D. Williams
Short review
Wikinomics shows how openness, sharing and collaboration across organizations create new forms of innovation and value creation. Through a number of international examples, the authors describe how digital networks make it possible to develop products, services and knowledge together.
Why we recommend the book
This book was groundbreaking when it was first published, and many of the ideas have since become a natural part of everyday digital life. The perspectives on collaboration, knowledge sharing, and open innovation processes align very well with the philosophy behind Invisible Capital, where people and networks are at the center of value creation.
The Competitive Strategy: Techniques for Analyzing Industries and Competitors
Author(s): Author: Michael E. Porter
Short review
Competitive Strategy is Michael E. Porter's classic work on how companies can understand the competition they find themselves in and develop a position that provides a basis for long-term profitability. Porter shifts the focus from the individual competitor to the structure of the entire industry and shows how competition is affected by customers, suppliers, new entrants, substitutes and the rivalry between existing companies. This forms the basis for what has later become known as Porter's Five Forces. The book is also about how companies can choose a competitive strategy on the basis of this analysis. It thus established an analytical language for strategy that has gained great importance in both research, teaching and practical strategy work.
Why we recommend the book
We recommend Competitive Strategy because it provides the analytical foundation for much of the thinking Porter later develops in What Is Strategy?. If a company is to choose a unique strategic position, it must also understand the competitive forces, the industry structure and the factors that affect the ability to create and retain value. The book is particularly useful because it reminds us that strategy is not just about internal goals, plans and ambitions. Strategy must be developed in the face of customers, competitors, suppliers, technology and structural changes in the market. Together with What Is Strategy?, the book therefore provides a much richer picture: First, the company must understand the competitive arena. Then, it must choose how to be different.
Competitive Advantage: Creating and Sustaining Superior Performance
Author(s): Author: Michael E. Porter
Short review
In Competitive Advantage, Porter moves the analysis from the industry to the business itself. The main question is how competitive advantage is actually created. One of the book's most important contributions is the value chain, where the business is understood as a system of activities that collectively develop, produce, market, deliver and support a product or service. Competitive advantage cannot therefore be understood only through products or overall strategies; one must examine the activities that create costs, differentiation and value. This understanding later becomes central to Porter's argument about strategic fit: the activities must not only be good in isolation, but also fit together and reinforce each other.
Why we recommend the book
We recommend Competitive Advantage because it brings strategy right down to where value is actually created: in the activities the business performs. This makes the book particularly relevant together with What Is Strategy?. When Porter argues in 1996 that strategy consists of performing different activities than competitors, or performing similar activities in other ways, this builds on the thinking he developed here. For our perspective on value creation, this is particularly interesting. Value does not arise because the business has formulated a strategy on a document, but through people, expertise, technology, processes, collaboration and activities that together enable the business to create something that customers value. The book therefore provides an important connection between strategy, competitive advantage and actual value creation.
The Competitive Advantage of Nations
Author(s): Author: Michael E. Porter
Short review
In The Competitive Advantage of Nations, Porter raises the perspective from business to countries, regions and business environments. The book is based on extensive studies of the competitiveness of ten leading trading nations and examines why certain countries and business clusters are particularly successful in certain industries. A central premise is that national prosperity is not simply something a country inherits through natural resources or other given conditions. It is created, and productivity, innovation, competence, competition and the quality of the environment in which businesses operate are crucial. Here, Porter also develops the well-known diamond model to explain how different national and regional conditions can interact and stimulate competitiveness.
Why we recommend the book
We recommend The Competitive Advantage of Nations because here Porter extends the strategy perspective to the ecosystem surrounding the business itself. Value creation does not occur in a vacuum. Businesses develop in societies with education, research, infrastructure, capital, suppliers, demanding customers, competing businesses and public institutions. This makes the book particularly interesting for understanding value creation as an interaction between people, businesses and society. It also provides an important corrective to the notion that a country's competitiveness can mainly be understood through low costs or access to natural resources. Innovation, productivity and the ability to continuously develop are far more central to Porter's explanation.
Understanding Michael Porter: The Essential Guide to Competition and Strategy
Author: Joan Magretta
Short review
Understanding Michael Porter brings together and explains the most important parts of Michael Porter's strategic thinking in one accessible whole. Joan Magretta herself worked on strategy at the Harvard Business Review and organizes Porter's ideas around two fundamental questions: What is competition, and what is strategy? She explains, among other things, the Five Forces, competitive advantage, the value chain, value creation, trade-offs, fit, and strategic continuity. This makes the connection between Porter's various works clearer than when the concepts are studied separately. The book also includes an interview with Porter.
Why we recommend the book
We recommend Understanding Michael Porter because it helps the reader see the whole picture of Porter's understanding of strategy. Porter is often reduced to the Five Forces or a few models used in isolation. Magretta shows why this is too simple. Competition, value creation, strategic positioning, trade-offs, activity systems, fit and continuity are interconnected. This makes the book a particularly good supplement after reading What Is Strategy?. It makes it easier to understand why Porter does not view strategy as a plan or a collection of goals, but as a coherent system of choices about how the business will create value and compete over time.
HBR's 10 Must Reads on Strategy
Authors: Harvard Business Review, Michael E. Porter, W. Chan Kim, Renée A. Mauborgne and more
Short review
HBR's 10 Must Reads on Strategy brings together some of Harvard Business Review's most influential writings on strategy. The original collection from 2011 features Michael E. Porter's What Is Strategy? as its main article and combines it with works on competitive forces, Blue Ocean Strategy, the organization's vision, business models, strategy execution, and the Balanced Scorecard, among others. The result is not one unified theory of strategy, but multiple perspectives on how organizations can develop, formulate, and execute strategy.
Why we recommend the book
We recommend HBR's 10 Must Reads on Strategy because it places Porter in a broader strategic context. After reading What Is Strategy?, it will be interesting to encounter other central perspectives and see how they complement, challenge, or extend Porter's understanding. The collection also shows why strategy cannot be reduced to a single model. Competitive position, choice, innovation, business model, execution, priorities, and measurement must be seen in context. For the reader who wants to move on from Porter and into the strategy discipline more generally, this is therefore a very good introduction.
Creating a Learning Society: A New Approach to Growth, Development, and Social Progress
Author: Joseph E. Stiglitz and Bruce C. Greenwald
Short review:
Creating a Learning Society examines how knowledge, learning, and technological development contribute to economic growth and long-term value creation. Joseph E. Stiglitz and Bruce C. Greenwald challenge the notion that economic development is primarily about accumulating more physical capital. They argue that society’s ability to create, disseminate, and apply knowledge is crucial to productivity growth and improved living standards. A key point is that learning does not only occur in schools and universities. It also occurs in businesses, through work, production, innovation, and the interaction between people and organizations. Knowledge can also spread from one business and one part of the economy to others.
The book thus provides an important perspective on why human capital, competence, innovation and learning must be understood as central parts of a society's ability to create value over time.
Why we recommend the book
We recommend Creating a Learning Society because it expands the understanding of what lies behind economic value creation.
Machines, technology and financial capital are important, but they do not create productivity growth alone. Behind the development are people who learn, develop knowledge, improve work processes, share experiences and find new solutions.
This makes the book particularly relevant to Invisible Capital and our perspective on value creation: A significant part of society's value-creating capacity is found in the knowledge, competence, and learning ability of the people who participate in the economy.
Stiglitz and Greenwald thus provide an academic foundation for one of the most important relationships in modern value creation:
The Value of Everything: Making and Taking in the Global Economy
Author: Mariana Mazzucato
Short review
In The Value of Everything, Mariana Mazzucato asks a fundamental question: What exactly is value – and who creates it? Mazzucato returns to the historical discussions of value in economics and shows how the understanding of value creation has changed. She challenges the notion that high income, high prices or large profits necessarily mean that correspondingly large values have been created. One of the book's most important contributions is the distinction between value creation and value extraction . Mazzucato examines the financial sector, the pharmaceutical industry, innovation and the public sector, among others, and argues that we must become better at distinguishing between activities that actually create new values, and activities that primarily extract values that have already been created.
The book also challenges the traditional notion that the private sector creates value while the public sector mainly consumes or redistributes it. Innovation and economic development often arise through a complex interaction between public investment, research, businesses, capital and people.
The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations
Author: Philippe Aghion, Céline Antonin and Simon Bunel
Short review
The Power of Creative Destruction is about one of the most important drivers of long-term economic growth: innovation.
Philippe Aghion, Céline Antonin and Simon Bunel build on Joseph Schumpeter's classic idea of "creative destruction" – the process by which new technologies, businesses, products and ideas challenge and replace existing solutions.
But the book is not just about the disappearance of the old. The authors examine why some economies manage to create continuous innovation and productivity growth, while others stagnate. Competition, entrepreneurship, research, education, institutions and public policy thus become important parts of the explanation.
Creative destruction also comes at a cost. New technologies and businesses create opportunities and jobs, but can also make existing skills, tasks and business models less relevant. The challenge is therefore to create societies that both promote innovation and enable people to participate in the transition.
Why we recommend the book
We recommend The Power of Creative Destruction because it shows why innovation is a fundamental driver of value creation .
Value creation is not just about producing more of what we already produce. It also occurs when people develop new ideas, technology, and ways of working that enable us to solve tasks better than before.
This makes the book particularly relevant to The Invisible Capital. Behind innovation are people with knowledge, expertise, creativity and experience. But Aghion's perspective also shows that human capital must be part of a larger system where competition, institutions, research, investment and policy create the conditions for new ideas to actually turn into economic and social development.
The book thus provides an important context in our understanding of value creation:
Knowledge → new ideas → innovation → productivity growth → long-term value creation.
Institutions, Institutional Change and Economic Performance
Author: Philippe Aghion, Céline Antonin and Simon Bunel
Short review
Institutions, Institutional Change and Economic Performance is one of Douglass C. North's most important works on why some societies are more successful than others in creating economic development over time.
North shifts attention from traditional factors of production such as capital and labor to the institutions that shape how people, businesses, and governments act and cooperate. Institutions are society's formal and informal rules of the game – including laws, regulations, norms, traditions, and established ways of organizing interaction.
These rules of the game affect the incentives that people and organizations face. They also affect investments, knowledge development, cooperation, transaction costs, and which economic activities emerge.
North also shows that institutions develop over time. History therefore matters: Today's economic opportunities are influenced by institutional choices and development paths that can stretch far back in time.
Why we recommend the book
We recommend Institutions, Institutional Change and Economic Performance because it explains a crucial aspect of value creation that easily becomes invisible:
Value creation needs good rules of the game.
People may have knowledge. Businesses may have capital. Entrepreneurs may have great ideas. A society may have natural resources and advanced technology. But outcomes are also influenced by the institutions that determine how people can collaborate, invest, compete, make deals, and develop businesses.
This makes North particularly interesting for our understanding of trust as part of invisible capital. Trust is not the same as institutions, but stable rules of the game, credible agreements, and well-functioning institutions can reduce uncertainty and make economic interaction easier.
North thus gives us another important part of the value creation picture:
Institutions → predictability and incentives → cooperation and investment → productive activity → long-term value creation.
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