Understanding the Information-Based Transformation of Strategy and Society

The world economy is undergoing dramatic changes, largely driven by the new availability of fine-grained information. Innovative ways of using data—large and small—have also prompted a rethinking of the boundaries for the combination and use of knowledge. The strategic design of information flows in the economy has the upside of higher economic rents and competitive advantage, as well as the downsides of wealth inequality and abuse of power. This has brought a wide range of regulatory challenges. To understand the nature of these sweeping changes, it is important to examine the new ways information is used, and how information flows can be leveraged to create competitive advantage and dampen competition. The analysis in this article examines four economic entities that produce and consume value, as well as three determinants for the modes of their operations. The economic entities include consumers, producers, markets, and society, whose interactions are determined by viability, networks, and agency. In this framework, we paint a picture of the transformation of information-based strategy in the future and suggest promising research opportunities.