Summary of The New Age of Innovation

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The New Age of Innovation book summary
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Rating

7 Overall

8 Applicability

7 Innovation

6 Style


Recommendation

Unlike many books on new economies or global changes, this work cites examples from around the world. C. K. Prahalad and M. S. Krishnan provide illustrative case studies from firms in India, Canada, the United States, Europe and elsewhere. They examine the various interactions among these firms and locales, grounding their theoretical discussions in reality. To add even more clarity, they also include many drawings and charts; unfortunately, these tend to force a simplistic Cartesian graphing system onto complex changes. Likewise, their abbreviations are more memorable than clear. Overall, though, these are minor glitches in an innovative and useful study. The authors’ analyses of how firms are interacting internationally, and redesigning themselves and the nature of business in the process, are both interesting and valuable. Its discussions of broad trends are unusually well-informed. getAbstract recommends this book to executives and others committed to keeping up with change, especially on a large, even global, scale.

In this summary, you will learn

  • How the nature of business is changing;
  • How this transformation will reshape your organization; and
  • What roles different parts of your organization will play.
 

About the Authors

C. K. Prahalad and M. S. Krishnan teach at the Ross School of Business at the University of Michigan. Prahalad is author of The Fortune at the Bottom of the Pyramid.

 

Summary

From Mass Production to Customization

A “fundamental transformation of business” is under way, sweeping through the entire economy. What’s more, over the next decade and a half, this change will become institutionalized. It will simply be the norm – how companies operate. Two interwoven principles govern this change:

  1. “N = 1” – The focus is shifting from the mass production that defined the industrial age to customization. Businesses now create economic value by serving individual needs. In the new economy, you must create a “unique, personalized experience” for each and every customer.
  2. “R = G” – Resources are going global. Consumer demands are spreading and diversifying so much that no one organization can meet them all. Instead, a network of organizations around the world will participate in delivering resources, giving rise to a “global ecosystem.”

How It Works

For a demonstration of these trends and how they work together, consider education. For many years, public education has been akin to mass production. Students grouped together in classes learned the same subjects at the same pace. Contrast...


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