Part 1 – What is e-commerce in 2026?
From online store to a coherent trading system
E-commerce used to be relatively easy to understand: The customer visited an online store, found a product, paid, and had the item delivered. In 2026, this definition has become too narrow. The customer moves between search engines, social media, websites, apps, physical stores, customer service, and artificial intelligence, often without thinking about which channel is used. Behind the experience, product data, payment, inventory, logistics, and integrated systems work together. Modern e-commerce is therefore no longer just about the online store, but about the entire system that makes it possible to create value for the customer before, during, and after the purchase.
Table of contents
From electronic commerce to modern e-commerce
The online store is only the visible part
The customer sees one business
E-commerce begins before the customer arrives at the online store
The moment of purchase is just one point in the customer journey
Warehouse and logistics are part of the customer experience
Data ties the trade together
Physical and digital commerce are growing together
AI pushes the boundaries once again
E-commerce is also about organization and people
How does e-commerce create value?
What is e-commerce in 2026?
From electronic commerce to modern e-commerce
The term e-commerce has been used for decades, but the content of the term has changed significantly along the way. In the early phase, the distinction between physical and electronic commerce was relatively clear. The customer either went into a store or visited an online store. The online store transferred many of the store's basic functions to the web: Products were presented digitally, the customer could add them to a shopping cart, pay electronically and have the goods delivered to their home. In the late 1990s and early 2000s, this represented a fundamental shift in how trade could be organized.
The basic model still exists, but it no longer describes the whole reality. A customer in 2026 might discover a product through social media, search for more information in a search engine, read tests and customer reviews, ask an AI assistant which options are best, check stock status in a local store, and finally complete the purchase on their mobile phone. The item can be picked up in store, delivered to their home, or returned through a completely different channel than the one the customer originally used.
This makes a seemingly simple question more difficult: Where did e-commerce actually take place? If we define e-commerce solely based on the transaction, we overlook large parts of the system that influenced the customer's choice and made the transaction possible. Therefore, modern e-commerce must be understood more broadly than the online store itself.
“E-commerce in 2026 is not a website with a buy button. It is a coherent system around customer needs, choices, purchases and experiences.”
The online store is only the visible part
To the customer, modern e-commerce can seem almost astonishingly simple. A product is found, a button is pressed, payment is approved, an order confirmation arrives, and a little later the package is on the doorstep. This very simplicity can hide how extensive the infrastructure behind the trade actually is.
Product information must be correct, price and availability must be up to date, inventory must be correct, payment must be processed securely and the order must be forwarded to the correct systems.
The goods must then be found in the warehouse, picked, checked, packed and handed over to the carrier. At the same time, the customer expects information about where the goods are and when they will arrive.
If something goes wrong, customer service is expected to know the order and be able to help without the customer having to reconstruct the entire purchase history.
If the business also has physical stores, the complexity increases further. The customer may expect to see if the product is available in the local store, order it digitally and pick it up physically, or buy online and return the item in store. At the same time, the store employee is expected to have access to information that makes it possible to help the customer.
The online store is therefore only the part of e-commerce that the customer can most easily see. Behind it are people, technology, data, warehouse, logistics, payment and work processes that must work together. A website can be visually outstanding and very user-friendly, but the customer experience will still be poor if the item listed as available is not available, the payment fails or the delivery fails.
The customer sees one business
Businesses have traditionally organized themselves by function and channel. Marketing has its responsibilities, its online store, its physical store, while IT, warehouse, logistics and customer service have their areas. This organization may be necessary internally, but it does not necessarily correspond to how the customer experiences the business.
If the website shows that a product is in stock, but the store can't find it, the customer isn't experiencing a problem between two internal systems. The customer is experiencing the business providing incorrect information. If the customer first explains their problem to a chatbot and then has to retell the whole story to a customer service representative, that's not a technology interface the customer is evaluating. It's the business.
This is a fundamental perspective in modern e-commerce because it shifts the focus from the business channels to the customer experience. The customer can move between the website, mobile, physical store, and customer service without considering these as separate journeys. For the customer, it is one relationship with one business.
“The customer doesn’t encounter our channels. The customer encounters our business.”
This realization is also behind the development from multichannel via omnichannel and on to unified commerce. We will return to this in detail in Part 4, but the principle is already important here: A modern e-commerce business must increasingly be organized around a coherent customer experience rather than separate digital and physical channels.
E-commerce begins before the customer arrives at the online store
One of the biggest changes in modern commerce is that a significant part of the purchasing process takes place outside the online store. The customer may start with a need without having decided on either a product, brand or retailer. A desire for good shoes for a mountain hike may lead to a search on Google, a video on YouTube, a discussion on Reddit, a product review, a post on social media or a question to an AI assistant.
Thus, the purchasing decision is influenced by the company's product information, professional content, customer reviews, reputation and digital visibility long before the customer visits the online store. The traditional notion of a neat customer journey from attention to interest, evaluation and purchase is therefore becoming increasingly difficult to maintain. The customer may examine a product, abandon the process, return several days later, visit a physical store and finally complete the purchase digitally in a completely different location.
E-commerce is thus not just about making the transaction itself easy. The business must also be relevant and credible as the customer tries to understand their own needs and consider possible solutions. Information and trust become part of the very infrastructure of commerce. This perspective will be the main theme of Part 2, where we delve into the customer, the content, the friction and the decision.
The moment of purchase is just one point in the customer journey
Conversion is, of course, a key dimension in e-commerce. Without a purchase, there is no commerce. The problem arises if the business makes the moment of purchase the only measure of whether the customer experience has been successful. A completed purchase tells us that the customer completed the transaction, but not necessarily that the customer was satisfied or wants to return.
Before purchasing, the customer must find the right product, understand the differences between the options, receive sufficient information about price, delivery and returns, and experience payment as secure. After the purchase, a new part of the experience begins. The order confirmation must arrive, the customer must be able to track the delivery, the item must arrive as agreed, and returns or complaints must work if something goes wrong.
This makes the customer experience significantly greater than the online store itself. A business can succeed in converting the customer and at the same time fail to create a long-term relationship. In other words, the customer can make the purchase and at the same time decide to never shop there again. For businesses that want profitability and loyalty over time, this distinction is crucial.
Warehouse and logistics are part of the customer experience
Warehouse and logistics were long considered behind-the-scenes functions. The customer only saw the result when the goods arrived. Digitalization has made these processes much more visible. The customer can follow the order through more and more steps, from the time the order is registered and the goods are packed until the carrier has taken over and the delivery is approaching the door.
Thus, logistics has also become communication. When the business promises delivery on Friday, this is part of the customer experience. When the customer can see that the package is on its way, the information creates security. When the item does not arrive as promised and no one can explain why, trust is weakened.
The warehouse has similarly become part of the digital experience. Updated inventory status allows the customer to know whether a product is available before purchase. Incorrect inventory information can, in turn, ruin an otherwise good customer journey. The digital experience is therefore dependent on the physical flow of goods functioning.
This shows how broadly we need to understand customer experience in e-commerce. The employee who picks the right item from the warehouse, the system that updates the inventory, and the driver who delivers the package are all part of the business's delivery to the customer.
The customer experience is created by the entire value chain, not just by those working on the website.
Data ties the trade together
Behind more and more of these processes lies data. Product information, prices, inventory, customer information, order status and delivery information must move between different systems and touchpoints. When this works well, the customer can experience shopping as simple even if the underlying infrastructure is complex.
However, this does not mean that more data automatically creates better e-commerce. Data must be correct, up-to-date, accessible and understandable. Systems must be able to communicate with each other, and the organization must have the competence to use the information. If product data is incomplete or inventory information is incorrect, technology will spread the problem faster rather than solving it.
This becomes especially important when artificial intelligence is connected to commerce. An AI assistant that is supposed to help the customer choose the right product depends on the information it can find and understand. Bad product data does not become good just because it is processed by an advanced AI model. On the contrary, the rise of artificial intelligence may make the quality of a business's information even more important.
Physical and digital commerce are growing together
For many years, the growth of e-commerce was often portrayed as a competition between online stores and physical stores. Over time, this distinction has become less interesting. The mobile phone has effectively placed digital commerce inside the physical store. The customer can stand in front of an item and at the same time compare prices, read reviews, research other models or check what competitors are offering.
The movement is also going the other way. A digital customer journey can end with a pick-up, advice, service or return in a physical store. The store can function as a showroom, warehouse, service centre and delivery point all at once. This makes the question of whether the customer is shopping “digitally” or “physically” less important than how the business manages to make the touchpoints work together.
This is the background for the development from multichannel to omnichannel and further towards unified commerce. The ambition is not only to be present in many channels, but to make information, systems and work processes coherent so that the customer experiences the business as a single whole.
AI pushes the boundaries once again
Artificial intelligence could be the next big shift in how e-commerce is organized. The search engine taught the customer to formulate search terms. The AI assistant makes it possible to describe a need. The difference may seem small, but it changes the very basis of product hunting.
A customer doesn't necessarily need to know that she wants a specific type of rain jacket. She can explain that she's going on a week-long mountain hike in Norway in September, expects a lot of rain, and needs something that's lightweight and won't get too hot during the activity. The task then becomes not just finding products that match certain search terms, but understanding the situation and assessing which products can best solve the need.
AI can already be used for search, recommendations, personalization and customer service. At the same time, developments point towards systems that can perform multiple actions on the customer's behalf. If AI assistants can eventually find products, compare alternatives, check availability and complete parts of the purchase, we are moving towards what is referred to as agentic commerce.
This could challenge one of the most fundamental assumptions of e-commerce: that the customer must necessarily visit the online store to make a purchase. If parts of the customer journey are moved to an AI assistant, the business's product information, data, credibility and ability to be understood by digital systems become even more important. We will go into this in much more depth in Part 5.
E-commerce is also about organization and people
The more advanced technology becomes, the easier it is to describe e-commerce as a technology project. But a modern e-commerce experience is the result of the work of people with very different skills. Marketing, content, design, UX, technology, analytics, purchasing, inventory, logistics, customer service and management all affect the customer experience.
None of these functions create the whole on their own. Yet the customer experiences the sum of them as one delivery. Therefore, collaboration across disciplines becomes part of the very competitiveness. An advanced platform is of little use if the product information is poor. Good analyses create little value if the organization does not act on the insight. Efficient logistics cannot fully compensate for a business that the customer does not trust.
This is where e-commerce meets the core of The Invisible Capital . Expertise, collaboration, culture, customer insight, and trust are harder to place on a product page than price and inventory status, but they are crucial to a business's ability to deliver a great experience over time.
"The most advanced e-commerce platform creates little value if the organization around it fails to create a good experience for the customer."
How does e-commerce create value?
The value creation of e-commerce cannot be reduced to the turnover registered in the online store. New digital sales opportunities can of course increase revenues and make the business accessible to customers far beyond the geographical market it could previously serve. But the values can also arise through lower costs, more efficient work processes, better inventory utilization, fewer errors and better decision-making.
For the customer, the value may be different. Digital commerce can save time, provide greater choice, make information more easily accessible, simplify comparison and create greater flexibility around purchases, delivery and returns. A solution that reduces the company's costs, but at the same time significantly worsens the customer experience, is therefore not necessarily good value creation. Similarly, an investment that, in isolation, increases costs can be valuable if it strengthens loyalty, reduces churn or makes the business more attractive over time.
This shows why e-commerce is so closely linked to the other disciplines we work with. Digitalization gives businesses new tools. Innovation can create new solutions and business models. The customer experience tells us whether the solutions actually work for the people who will use them. The expertise and organization determine whether the business is able to deliver. Value creation is the result when these parts work together.
What is e-commerce in 2026?
We can thus return to the question in the title. E-commerce is still trade that takes place entirely or partly through digital solutions, but the practical reality has grown far beyond this simple definition. If we are to understand e-commerce in 2026, we must look at the entire system around the customer.
Modern e-commerce consists of people, technology, information, data, payment, warehouse, logistics and customer contact that together make it possible to identify a need, find and evaluate alternatives, complete a purchase, receive the product or service and get help afterwards. Some of these activities take place digitally, others physically. For the customer, the distinction is increasingly less important.
"The future of e-commerce is not determined by how many digital solutions a business has, but by how well they work together for the customer."
The online store is therefore still important, but it is no longer the whole of e-commerce. The most important starting point for the rest of this series will therefore not be the channel itself. We will study the customer and the system around the customer.
Next part: Part 2 – The customer and e-commerce – how search, information, trust, friction and customer experience affect the purchase
Once we have established that e-commerce is bigger than the online store, it is natural to shift our attention to the person the entire system exists for: the customer. In the next section, we will examine how people discover needs, search for information, compare alternatives, build trust, and decide to buy – or not. We will also explore a phrase from the early history of the internet and examine why it may be even more relevant in 2026 than when it was written: “Content is King.”
Academic background and further specialization
This series builds on several academic tracks in The Invisible Capital . The study in eMarketing at BI Norwegian School of Business provides an early academic perspective on how the internet changed marketing, communication and trade, while Innovation and Commercialization connects development to innovation, new ideas and business models. The Oxford seminars provide an important perspective on trade, retail, the customer and the customer experience, while San Francisco represents the meeting of technology, digitization, innovation and new digital business models. Together, these perspectives illustrate a common principle in this series: Technology is a tool. Value arises when people use it to do something better.
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.
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.
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.
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 experience 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, digitalisation and innovation presented on the website have their roots in the knowledge this book conveys.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 for productivity growth and increased 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 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:
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.
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.
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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