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CHAPTER VI - Conclusion & Endnotes

A lot has changed in the quarter century since 1987. Twenty-five years ago, the Internet was largely restricted to college campuses and research labs. E-mail systems were isolated from each other, and electronic links between companies had to be set up through commercial network providers. Only a tiny fraction of the public was online, and virtually all of them were restricted to slow, dial-up connections. The invention of the World Wide Web, which fueled the evolution of the Internet into a true mass media, was still several years in the future. Yet, the potential power of network connections was already becoming evident.

We now live in a world in which almost everyone can be online at any time through pervasive broadband networks, both wired and wireless. Social media and e-commerce are everyday realities. But the implications of this dramatic evolution are still to be fully understood. Many new institutions have been created to provide new services, and many older organizations have recognized that they need to change in order to operate successfully in this new environment. It is becoming clear that in this highly connected world, everyone is part of an ecosystem—or multiple ecosystems—and that learning how to collaborate effectively with others has become a critical survival skill. But just how organizations should change, how far-reaching the process of re-invention needs to go, and in what directions, remains unclear. In particular, questions remain about when it makes sense for a firm to unbundle services and get more focused, and when it make sense to get larger. This exploration will continue.


  1. Peter W. Huber, The Geodesic Network: 1987 Report on Competition in the Telephone Industry, Funded by the Antitrust Division of the U.S. Department of Justice, January 1987.
  2. The seven Baby Bells, which provided local phone service, were Ameritech, Bell Atlantic, Bell South, Nynex, Pacific Bell, Southwestern Bell and U.S. West, along with AT&T, which was limited to long distance service. Today, Ameritech, Bell South, Pacific Bell and AT&T are parts of Southwestern Bell (which renamed itself AT&T after acquiring that company in 2005); while Nynex was acquired by Bell Atlantic (which changed its name to Verizon in 2000 after merging with GTE); and U.S. West became part of CenturyLink.
  3. A.M. Rutkowski, “The Geodesic Network: Impact of the Huber Report,” Telecommunications, Vol. 21, No. 4, April 1987, pages 38-45.
  4. Thomas Malone, Joanne Yates and Robert Benjamin, “Electronic Markets and Electronic Hierarchies,” Communications of the ACM, Volume 30, Number 6, June 1987, pages 484-497,
  5. Ibid.
  6. John Hagel, John Seely Brown and Duleesha Kulasooriya, Future of the Corporation (The Institutional Landscape of the Future), Background Readings for the Aspen Institute Roundtable on Institutional Innovation, Aspen, Colorado, July 8-10, 2013.
  7. Marc Levinson, The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger (Princeton University Press, 2006).
  8. Michael Kan, “Foxconn to speed up 'robot army' deployment,” PC World, June 26, 2013,
  9. Top companies: Biggest employers, CNN Money,
  10. According to Wikipedia, estimates of the number of workers employed at Foxconn City in Shenzen vary from 230,000 to 450,000. Among the products it manufactures are Apple’s iPads and iPhones, Amazon’s Kindle, Microsoft’s Xbox, Sony’s PlayStation, and Nintendo’s Wii.
  11. Orly Lobel, “My Ideas, My Boss’s Property,” The New York Times, Monday, April 4, 2014,
  12. On Amir and Orly Lobel, “How Noncompetes Stifle Performance,” Harvard Business Review, January-February 2014,
  13. For a more detailed description of the rationale and operation of InnoCentive, see the report of the 2011 Aspen Roundtable, Richard Adler: Institutional Innovation: Oxymoron or Imperative? Aspen Institute, 2012,
  14. Ron Lieber, “Financial Advice for People Who Aren’t Rich,” The New York Times, April 11, 2014,
  15. Jonah Comstock, “PatientsLikeMe signs five-year data access deal with Genentech,” MobiHealth News, April 10, 2014,
  16. A classic example of the challenges that have to be overcome to introduce an innovation – even one with obvious benefits – is the story of the heroic struggle by one young naval officer to convince the U.S. Navy to adopt a simple innovation that radically improved the accuracy of ship-mounted guns. The story was originally told by Elting Morrison in his study of Men, Machines and Modern Times (MIT Press 1966). For a summary, see the 2011 Roundtable report, Institutional Innovation: Oxymoron or Imperative?
  17. “The World’s Most Innovative Companies,” Forbes, August 14, 2013,
  18. For an explanation of the value of V2MOM by the founder of the company, see Marc Benioff, “How to Create Alignment Within Your Company in Order to Succeed,” blog, April 9, 2013,
  19. Share the Model,
  20. Alex Williams, “Salesforce Is A Platform Company. Period,” Tech Crunch, September 30, 2013,
  21. Jay Yarrow, “This Is The Internal Grading System Google Uses For Its Employees,” Business Insider, January 6, 2014,
  22. Staci D. Kramer, “Google News Creator Watches Portal Quiet Critics With 'Best News' Webby,” Online Journalism Review, September 25, 2003,
  23. Steve Denning, “Why Did IBM Survive,” Forbes, July 10, 2011,
  24. Michael B. Sauter, Alexander E.M. Hess and Thomas C. Frohlich, “The Most Innovative Companies in the World,” USA Today, January 18, 2014,
  25. Beth Buczynski, “Does Car Sharing Really Reduce Vehicle Ownership?” Shareable, August 6, 2011,
  26. For an extended version of this argument, see Jeremiah Owyang, The Collaborative Economy, The Altimeter Group, June 4, 2013,
  27. Irving Wladawsky-Berger, “The Nature of the Firm in the Digital Economy,” July 29, 2013,
  28. Studies have found that many large-scale software projects run over budget and fail to meet expectations. For example, one study found that on average, large IT projects ran 45 percent over budget and seven percent over time, while delivering 56 percent less value than predicted. Michael Bloch, Sven Blumberg and Jürgen Laartz, Delivering large-scale IT projects on time, on budget, and on value, McKinsey & Company, October 2012,
  29. Jordan Kahn, “Smartphones are now a 95% Android-iOS global duopoly,” 9TO5MAC, February 12, 2014,
  30. For more about the structure and operations of Li & Fung, see John Hagel, John Seely Brown and Scott Durchslag, Orchestrating Loosely Coupled Business Processes: The Secret to Successful Collaboration, 2002,
  31. Amit Sahasrabudhe, Holly J. Kellar, Vijay Sharma and Bill Wiltschko, Performance ecosystems: A decision framework to take performance to the next level, Deloitte Center of the Edge, 2012,
  32. The story of the big wave riders, who used video to record their latest exploits and immediately posted them online, is told in John Hagel III, John Seely Brown and Lang Davison, The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion. Basic Books, 2010.
  33. “An Analysis Of The U.S. Personal Automobile Insurance Market Part 1,” Trefis, December 5, 2013,
  34. Elliott Kalan, “The Original Futurama: The Legacy of the 1939 World's Fair,” Popular Mechanics, March 11, 2010,
  35. Stacey Higginbotham, “The Top 10 Cities With the Best Broadband,” GigaOm, May 25, 2010,
  36. Cargo Intelligence Security and Logistics Association,
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