Part 9 – Mobile First
How the smartphone made mobile the starting point for the digital world
In the early web, digital life was tied to a specific location. You sat down in front of a computer at home, in the office, at school or in the library, opened your browser and went online. The internet was available, but access was still tied to situations where people actively sought out a computer.
The mobile phone gradually changed this. Phones gained text messaging, simple browsers, and eventually email and data services. BlackBerry made mobile email essential for many professional users. Nokia and other manufacturers developed increasingly advanced phones, while faster mobile networks made it increasingly convenient to use data services outside the home and workplace.
The smartphone would, however, change the very relationship between humans and the internet far more fundamentally. When Apple launched the iPhone in 2007, a large touchscreen, an advanced mobile browser, and a much more direct graphical interface were combined into one personal device. Android followed, helping to spread the smartphone across manufacturers, markets, and price ranges.
The Internet was no longer primarily tied to the desktop. It followed the human.
The smartphone was more than a small computer
It's tempting to describe the smartphone as a pocket-sized PC, but that underestimates what actually happened. The smartphone combined a number of features that the traditional computer typically didn't have.
The phone could know where it was through GPS and other location technologies. It had a camera and microphone. It could detect movement and orientation. It was connected to the cellular network and increasingly faster wireless networks. It was personal and usually tied to one specific person.
Most importantly, it was almost always with us.
This allowed digital services to be developed around situations that had previously not been digital. We could find our way while walking, compare prices while standing in a store, check in at the airport on our way to the street, order transportation from the sidewalk, pay at the checkout, and document an event with a camera and then share it instantly with others.
Digitalization didn't just become mobile. It became situational .
iPhone and a new interface between humans and technology
The smartphone also represented a major shift in Human–Computer Interaction and UX. For decades, the computer had been dominated by the keyboard and mouse. The smartphone made fingers a central part of the interface.
People could tap, swipe, zoom, and manipulate digital objects directly on the screen. This affected how digital services had to be designed. A link that was easy to click with a precise mouse pointer could be difficult to hit with a finger. Menus had to be simplified. Information had to be prioritized more tightly. Screen space was limited, and content that worked well on a large computer screen could become almost unusable on a mobile phone.
The mobile phone thus made an old design problem even more obvious:
What is really most important to the user right now?
It was no longer enough to shrink the existing website. Businesses had to start thinking differently about the user experience itself.
The App Store and the Rise of the App Economy
When Apple launched the App Store in 2008 and Google established the Android Market, which later became Google Play, the smartphone gained a new economic infrastructure. Software had of course been distributed long before this, but app stores unified discovery, distribution, installation, updating and eventually payment into a system that was easily accessible to millions and later billions of people.
Developers could now distribute a mobile service to a global market through a few central platforms. Banks developed mobile banking. Media houses developed news apps. Airlines developed booking, check-in and boarding pass solutions. Retailers developed loyalty apps. Game developers built global businesses around mobile.
The smartphone thus became not just a new screen for existing services. It became the foundation for a new application economy .
At the same time, new gatekeepers emerged. Apple and Google controlled the most important distribution channels and could set rules for which apps were allowed access to the market, what technical requirements applied, and how payment and other features were handled.
Again we see a pattern that runs through the history of digitalization:
New technology can open markets while creating new positions of power.
The website had a mobile issue
The rapid spread of smartphones also created a significant problem for businesses. Most websites were designed for large computer screens.
When these pages were opened on a small mobile screen, the result could be tiny fonts, wide pages, links that were hard to hit, and a constant need to zoom and scroll sideways. The site was technically accessible, but the user experience could be very poor.
An early solution was to develop separate mobile websites. Many businesses created separate versions of their websites that were optimized for smaller screens. But this created new challenges. Content, technology, and functionality often had to be maintained in multiple locations, and the user could encounter different services depending on the device being used.
There was a need for a more flexible model.
Responsive Web Design – one website, many screens
In 2010, Ethan Marcotte published the article Responsive Web Design in A List Apart . The concept would become central to modern web development.
The idea was initially simple. Instead of building one website for PC and another for mobile, the same website could adapt its presentation to the screen it was being viewed on. Flexible layouts, flexible images, and CSS media queries made it possible to change how content was presented based on, among other things, the available screen width.
Columns could be nested. Navigation could be changed. Images could be resized. Text could be presented in a way that was still readable on small screens.
Responsive design didn't solve all the problems of mobile user experience, but the principle changed the way we thought about the web. We no longer necessarily designed a website for one specific screen. We had to develop flexible digital systems that could work in different contexts .
Mobile First – start with the most important thing
The term Mobile First is particularly associated with Luke Wroblewski, who argued that digital products should be developed with mobile as a starting point instead of starting with the desktop version and then trying to squeeze the content onto a smaller screen.
It may sound like a purely technical or visual design principle, but the thinking is far more fundamental.
When the screen is small, the designer must prioritize. What does the user really need? What information must come first? What action is most important? What can be removed without losing value from the service?
Mobile First thus forced the business to consider the value of each element on the screen. The limitation could make the product better because it reduced the ability to fill the solution with content and features simply because there was space for them.
Instead of starting with everything the business wanted to tell, development could begin with what the person was actually trying to do .
Mobile changed customer expectations
At the same time, the smartphone made customers less willing to accept the distinction between the physical and digital worlds.
If the customer could find information anywhere, she also expected the business to be accessible anywhere. She could stand in front of a closed store and check opening hours. She could sit on the train and change her flight. She could photograph a product in a store and research alternatives online. She could read customer reviews while standing in front of the restaurant she was considering visiting.
Digital accessibility was no longer something that primarily applied when the customer was sitting at home in front of a computer. The digital service had to function in the middle of the customer's life .
Location – when the service knew where you were
GPS and other positioning technologies made location a new digital resource.
A map service could show where the user was. A restaurant service could find nearby restaurants. A weather app could show the weather where the user was actually. A transportation app could find the nearest stop and calculate the route there.
Digital services could thus begin to answer a question that the traditional web had only been able to handle to a limited extent: What is relevant here?
This was a significant advancement in search. The search engine had made user intent important. The smartphone could add context.
A search for “coffee” didn’t just have to mean that the user wanted general information about coffee. It could mean: Where can I buy coffee nearby right now?
Time, place and need could be linked together.
The map became a digital platform
The map services thus became far more than digital versions of paper maps.
Google Maps, Apple Maps, and other services could connect geography to businesses, public transportation, traffic, opening hours, photos, customer reviews, and navigation. Over time, the map became a gateway to more and more services.
The physical world gained a digital information layer.
For businesses, this was of great importance. A restaurant, shop, hairdresser or other business not only had to exist physically. The information about the business also had to be correct and possible to find in digital maps, search services and other platforms.
Thus, physical presence and digital visibility began to merge .
The camera made the world publishable
The smartphone camera also had a major impact on digital development.
Previously, a digital photo often had to be taken with a separate camera, transferred to a computer, and then published online. The smartphone brought the entire process together in one device. Photographing, editing, publishing, and distributing could be done in a matter of seconds.
This was an important prerequisite for the growth of visually oriented services like Instagram, Snapchat and later TikTok. Everyday life could be documented and published as it happened.
But the camera also evolved into a practical digital tool. QR codes could be scanned. Documents could be digitized. Products could be identified. Damage could be documented.
Receipts could be registered.
The camera thus became far more than a camera. It became a sensor between the physical and digital worlds .
Mobile payment – your phone becomes your wallet
Payment was another area the smartphone was going to change.
Digital payment solutions had existed for a long time, but mobile phones made payments personal and available in an increasing number of situations.
Digital wallets and contactless payment solutions made it possible to use the phone as a payment instrument.
In Norway, Vipps played a particularly important role. The solution made it easy to transfer money between people and later developed into commerce and other payment services. Mobile payments reduced the distance between the desire to carry out a transaction and the actual payment.
The customer did not necessarily need cash, a physical payment card, or a computer.
The phone could be identity, communication, store and wallet in the same device.
The mobile connected physical and digital commerce
This had major consequences for the retail trade.
Physical retail and e-commerce had long been treated as relatively separate channels. Mobile made the distinction increasingly difficult to maintain.
The customer could research a product on their mobile phone before entering the store. They could compare prices while standing in front of the shelf. They could read reviews, check stock status, show their membership card, receive offers and pay with the same device. After the purchase, they could track the delivery to their home or contact customer service.
The digital customer journey thus ceased to be something that took place in parallel with the physical journey.
The two began to merge.
The mobile phone became the connection between the points of contact .
Apps created new services – not just new channels
Some of the most important businesses in the mobile economy were also not just mobile versions of existing services.
Uber showed how mobile phones, GPS, maps, payments and a digital marketplace could be combined into a new service model. Airbnb used mobile as a key part of a platform that connected travelers with people offering accommodations.
Food delivery services connected ordering, restaurant, payment, delivery, and location in real time.
The innovation did not necessarily arise in a single technology. It arose through the combination of technologies that the smartphone made available at the same time .
The mobile phone thus not only digitized existing services.
It made new services and business models possible.
Push notifications – the business moved to the lock screen
The apps also created a new communication channel.
Push notifications made it possible for businesses to reach users without the user having to open the service first. The bank could notify them of a transaction. The airline could tell them that the street had changed.
The transport app could notify of a delay. The online store could tell that the package was on its way.
This could create significant value.
But the same mechanism could be used for offers, news, promotions, reminders and countless attempts to get the user back to the service.
The mobile phone lock screen thus became a new competitive arena in the attention economy.
It also raised an important UX question: When is a notification useful, and when does it just become a distraction?
Personalization took on a new dimension
The mobile phone is usually a very personal device, which also made it interesting for personalization.
A digital service could potentially know a user's past actions, preferences, location, and context, allowing content, recommendations, and features to be tailored far more precisely than before.
But the more personalized the service became, the more important issues of privacy, consent, and control became.
A location service is useful precisely because it knows where the user is. That same knowledge can be problematic if the user does not understand who is collecting it, how long it is stored, or how it is used.
The history of mobile is therefore also about an increasingly difficult trade-off between convenience, personalization, and privacy .
Mobile First eventually became human first
Perhaps the most interesting thing about Mobile First is that the principle ultimately points beyond the mobile phone itself.
The point was never really that the smallest screen would win over the largest. The key was to understand the user's context and prioritize accordingly.
What is the person trying to do? Where is she located? What device is she using? How much attention does she have available? What information does she need right now?
This builds directly on Human–Computer Interaction, usability and UX from the previous part.
Mobile First thus became an important reminder that digital service development should begin with human needs and the situation in which the technology will be used .
The smartphone became man's digital remote control
In the space of relatively few years, the smartphone brought together features that previously required an entire collection of separate products and services.
The phone could replace or supplement the camera, map, music player, calendar, clock, newspaper, television, bank, ticket, boarding pass, store, payment card and game console. It became the gateway to messaging, social media and work tools. Later came authentication, smart home management, health data and an increasing number of public and private services.
It is therefore insufficient to consider mobile as just one channel among many.
The smartphone evolved into humans' personal interface to large parts of the digital economy .
When the digital world became continuous
The PC made information digital. The Internet connected information. The Web made it accessible. The search engine made it findable. Social media turned people into publishers.
The smartphone did something more.
It made the digital world continuously present in people's everyday lives.
We no longer needed to go online. We were already there.
This had enormous consequences for how businesses developed services, how customers shopped, how people communicated, and how the physical and digital worlds were connected.
But it also created something else. As billions of people began using personal digital devices for large parts of the day, more and more actions could be recorded as data.
What did we search for? Where were we? What did we click on? What did we buy? What services did we use? How did we move between digital and physical touchpoints?
The smartphone became more than just an interface to the digital world.
It also became one of history's most comprehensive sources of digital data on human activity.
And that's where the next chapter begins:
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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