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Greg Satell of Forbes recently wrote, “For most of corporate history, scale provided benefits that went beyond just consolidation of fixed costs and negotiating power, but also included informational advantages.  Now, however, the scale economy has been replaced by a semantic economy, where information flows freely across once impermeable boundaries of firm and industry. One of the most salient developments resulting from the rise of the semantic economy is the shift from closed innovation to open innovation.  Whereas before, research and development was primarily done behind closed doors, now it is common for firms to build collaboration networks, which can include partners, startups and even consumers.”

Satell continues, “UC Berkeley’s AnnaLee Saxenian argues that the semantic economy is not only a technological phenomenon, but a personal one as well.  Her research suggests that the ‘brain drain’ from developing countries has been replaced by a ‘brain circulation’ in which the world’s best minds often straddle cultures. The bottom line is that old notions of boundaries of scale, industry and geography have become impotent.  These boundaries have been replaced by often informal connections that transcend formal structures. While the world has become more complex, our ability to process data has also increased exponentially.  The combination of accelerating returns in technology and rapidly improving algorithmic approaches has made it possible to analyze incredible amounts of information at blazing speed. The result is big data and it is incredibly disruptive.”

Read more here.

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