The 21st Century Corporation

For nearly all of its life, the modern corporation has made money by making things. It has done so by amassing fixed assets, organizing large workforces, and managing hierarchically. The 21st century corporation will do little of that. It will make money by producing knowledge created by talented people working with partners all over the globe. So fundamental will the changes be that the corporation as we know it will likely exist only on the margins of the economy.

Nothing less than the fundamental nature of economic value is undergoing change. Some 200 years ago, Thomas Jefferson captured the special quality of information as an economic good: "He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me." And the more candles lit, the brighter the light. Jefferson, of course, didn't know about network effects--but he was prescient nonetheless.