Digital technologies are revolutionizing traditional interdependencies among businesses. As a result, managers have begun to recognize their business environments as digital ecosystems. For firms accustomed to framing their business environments as industries, this represents a significant shift in perspective-one that requires an understanding of fresh strategic initiatives necessary to compete in the digital era. In this article, we highlight what is new and different about digital ecosystems for firm strategy. We offer frameworks that explain how digital ecosystems provide firms with new sources of value and new avenues for growth. Two sets of underlying concepts govern these frameworks: (1) production and consumption ecosystems and (2) digital envelopes and product-in-use information. We introduce and elaborate upon these foundational concepts and highlight new strategic options for firms to compete in digital ecosystems.

Most companies already have plenty of creativity and technology. What they don’t have is the managerial skill to convert that creativity and technology into earth-shattering innovation. So how do they harness innovation? The first step is to understand what they need—the managerial skills, abilities, and traits that enable digital innovation. We need to not only acknowledge digital innovators, but promote their role as creators of economic and social value. In this article, S. Somasegar, a former senior executive at Microsoft, and Michael Volpe, former chief marketing officer at HubSpot, discuss the ideal digital innovator’s profile. Key excerpts, arranged under six major themes, deal with what an industry expert looks for in a potential digital innovator: 1) a playful attitude toward technology; 2) agile experimentation (including the use of minimum viable products); 3) mastery of the digital domain; 4) technological innovativeness; 5) a strong online identity; and 6) reliance on an extensive social network for expertise and advice. Entrepreneurs have historically taken one of two approaches to defining IT: it’s either a necessary evil or the product itself. Today there is a third approach, one that will become the dominant path for most innovators and entrepreneurs, especially those building information products.

SIGFOX is a provider of infrastructure services to the emerging Internet of Things (IoT) industry. The company has a homegrown solution to the problem of high energy consumption networks. Their low power consumption wide area network (LPWAN) will unleash the IoT industry by allowing companies to build viable solutions using IoT. Just as with operating systems, an infrastructure is only as valuable as the solutions that are available on them. A basic challenge needing to be overcome before gaining traction within IoT is that their infrastructure must become widely available. In one approach, the company can get third parties to buy their technology and use it to provide coverage. In the second approach, SIGFOX has to raise capital and do its own expansion of the infrastructure. In addition, they have also chosen a mixed approach: to deploy and operate by themselves in a minority of countries (France, Germany, US) and to deploy/operate via partners (SIGFOX Network Operators) in the rest of the world.

Appirio, a Cloud Computing services and consulting business, is experiencing explosive growth buoyed by its successful strategic partnerships with Google and Salesforce.com. The company practices what it preaches -- choosing to keep all of its systems in the cloud. Appirio's senior leadership team is convinced that building its venture on the cloud offers extreme competitive advantages in terms of agility, ability to scale and employee empowerment to drive rapid innovation. Will Appirio ascend to rocket heights or are the skies darkening with challenges that will hurt a cloud pure-play such as Appirio? What lessons, if any, are there for other entrepreneurs hoping to turn their IT systems into an entrepreneurial growth engine?

Big data is a capability that allows firms to extract value from large volumes of data. When combining two dimensions — business objective and data type — the use of big data can be organized into four main strategies. 1) Performance management involves understanding the meaning of big data in company databases using pre-determined queries and multidimensional analysis. The data used for this analysis are transactional. 2) Data exploration makes heavy use of statistics to experiment and get answers to questions that managers might not have considered. It leverages predictive modeling techniques to predict user behaviour based on past business transactions and preferences. 3) Social analytics examines the vast amount of non-transactional data, often on social media platforms. 4) Decision science involves experiments and analysis of non-transactional data, such as consumer-generated product ideas and product reviews. In addition to explaining these strategies, this article provides a list of popular big data techniques and vendors and identifies three emergent big data practices: a) integrating multiple big data streams; b) building a big data capability; and c) being proactive and creating a big data policy.

Over the past decade companies have become more global and employee groups more diverse than ever before. Organizations are less hierarchical and more collaborative. And today's offices are full of once unimaginable technological distractions. We asked experts in cross-cultural communication, information networks, and the science of attention what skills executives should cultivate to tackle these new challenges. Molinsky thinks that managers must overcome psychological barriers in order to act in ways that other cultures find appropriate. Davenport and Iyer explain why the devolution of hierarchy has increased the value of building and wielding influence through digital networks, and offer tips for how to do it. And Davidson tells managers to get over their fears about distraction and embrace the brain's natural tendency to divide attention.

Organizations that understand the key capability of social technologies to enable employees to connect with others to boost job and organizational performance will realize significant benefits. Accordingly, organizations need to think strategically about using these technologies to help transform themselves into truly collaborative workplaces. This article provides the background on MITRE — an R&D consulting firm with U.S. government clients — and explains the value proposition of social technologies at MITRE and how building social technologies at MITRE resulted in higher performance. Finally, it lists four key lessons learned from social technology, including integrating social technologies into existing work practices and experimenting with various technologies.

Our annual survey of ideas and trends that will make an impact on business: Elizabeth Warren and Amelia Tyagi believe consumer credit should be made as safe as any other product. Paul Collier and Jean-Louis Warnholz reveal an increasingly investment-friendly climate in sub-Saharan Africa. Amy J.C. Cuddy asserts that warmth and competence are not mutually exclusive. John Sviokla predicts a surge of peer-to-peer lending in the wake of the financial crisis. Noah J. Goldstein explains the impact of social pressure on customers' behavior. Raymond Fisman urges the creation of a global forensic economics lab modeled on Interpol. Paul Saffo warns of a brain drain out of the U.S. Gurdeep Singh Pall and Rita Gunther McGrath contemplate the ramifications of immortalizing business meetings in searchable, high-quality digital video. Janine M. Benyus and Gunter A.M. Pauli illustrate the advantages of innovation copied from nature. Michael I. Norton observes that an investment of effort can lead to unduly glorifying its results. Peter Schwartz dispels the illusion that global temperatures are actually falling. Nicholas A. Christakis shows that personal influence wanes beyond three degrees of separation. Marcelo Suarez-Orozco sees the migrant millions as untapped brand emissaries to their relatives back home. Ian Bremmer and Juan Pujadas chart the growing influence of state capitalism in four industry sectors. Steve Jurvetson shares a fun way to stimulate the growth of new brain cells. Lew McCreary spotlights the interior designs of two adventurous architects who aim to counteract the degenerative effects of physical comfort. Tom Ilube explains the semantic web - a quiet revolution in technology that will radically change the internet. Alex Pentland weighs the benefits of combining two distinct kinds of social networking. Thomas H. Davenport and Bala Iyer look at the offshore outsourcing of decision making. R. Stanley Williams envisions a central nervous system for the earth.

Even among internet companies, Google stands out as an enterprise designed with the explicit goal of succeeding at rapid, profuse innovation. Much of what the company does is rooted in its legendary IT infrastructure, but technology and strategy at Google are inseparable and mutually permeable - making it hard to say whether technology is the DNA of its strategy or the other way around. Whichever it is, Iyer and Davenport, of Babson College, believe Google may well be the internet-era heir to such companies as General Electric and IBM as an exemplar of management practice. Google has spent billions of dollars creating its internet-based operating platform and developing proprietary technology that allows the company to rapidly develop and roll out new services of its own or its partners' devising. As owner and operator of its innovation "ecosystem," Google can control the platform's evolution and claim a disproportionate percentage of the value created within it. Because every transaction is performed through the platform, the company has perfect, continuous awareness of, and access to, the by-product information and is the hub of all germinal revenue streams. In addition to technology explicitly designed and built for innovation, Google has a well-considered organizational and cultural strategy that helps the company attract the most talented people in the land - and keep them working hard. For instance, Google budgets innovation into job descriptions, eliminates friction from development processes, and cultivates a taste for failure and chaos. While some elements of Google's success as an innovator would be very hard and very costly to emulate, others can be profitably adopted by almost any business.