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Publications
  • September–October 2017
  • Article
  • Harvard Business Review

Managing Our Hub Economy: Strategy, Ethics, and Network Competition in the Age of Digital Superpowers

By: Marco Iansiti and Karim R. Lakhani
  • Format:Print
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Abstract

A small number of digital superpowers—Alibaba, Amazon, Microsoft, and others—have become “hub firms” because they control access to billions of mobile customers coveted by all kinds of product and service providers. These hubs drive increasing returns to scale and claim a disproportionate share of the value being created in the global economy. The authors argue that the hub economy will continue to spread across more industries, concentrating more power in the hands of a few. As an example, they take an in-depth look at the auto industry and how Apple and Alphabet/Google are poised to become the main beneficiaries as cars turn into digitally connected spaces for work, entertainment, and shopping. As hubs proliferate and expand their reach, the danger is that they will exacerbate economic inequality and threaten social stability. It is thus incumbent on all stakeholders—traditional companies, start-ups, institutions, and communities—to make certain changes in the ways they do business. Moreover, hub firms themselves must do a better job leading responsibly for the good of all, not just creating and capturing value but doing more to sustain other players in the ecosystem.

Keywords

Competition; Strategic Planning; Auto Industry; Technology Industry

Citation

Iansiti, Marco, and Karim R. Lakhani. "Managing Our Hub Economy: Strategy, Ethics, and Network Competition in the Age of Digital Superpowers." Harvard Business Review 95, no. 5 (September–October 2017): 84–92.
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About The Authors

Marco Iansiti

Technology and Operations Management
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Karim R. Lakhani

Technology and Operations Management
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  • Conservatism Gets Funded? A Field Experiment on the Role of Negative Information in Novel Project Evaluation By: Jacqueline N. Lane, Misha Teplitskiy, Gary Gray, Hardeep Ranu, Michael Menietti, Eva C. Guinan and Karim R. Lakhani
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