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The strategies for succeeding in the knowledge economy are predicated on the notions that knowledge and information are costly to generate and can be protected. It makes sense to build your enterprise’s competitive differentiation around its knowledge capital only if that information is unique to the firm.

For example, the competitive advantage of participants in the encyclopedia business was largely based on the idea that the information in the encyclopedia could be protected and would be expensive to reproduce, which limited new competitors.

Today, the notion that knowledge and information are costly and protectable is being challenged by the four forces of digital change. In combination, these forces are pushing the knowledge economy to the margins and giving rise to the digital economy.

  • Sharing and collaboration. Digital technologies make it easy to share information freely. Collaboration platforms create new pathways for knowledge production that depend on connections between people rather than on hierarchical controls.

  • Information systems, particularly the Internet of Things, are generating powerful live information flows. Our enthusiasm for creating these data streams—from devices and ourselves—implies that information at the point of creation is more valuable than any legacy knowledge.

  • Artificial intelligence (AI) and machine learning. AI and other advanced analytics technologies decrease information processing costs. Today, AIs can write poetry and songs and discover new compounds in medicine. It may not be long before an AI receives a patent. Just as companies used capital to accelerate through the experience curve in manufacturing, it is now possible to use machine learning to power through the experience curve of the digital economy.

  • Engagement of the world’s cognitive surplus. Wikipedia, YouTube, and Linux are early examples of using collaboration technology to harness latent cognitive capacity around the globe to topple traditional sources of competitive advantage.

Together, these forces mean all knowledge has true competitive value only at the moment it is created. It decays quickly into legacy knowledge. The only way to find competitive advantage in this digital economy is to become a Live Business: to learn to use information in the moment to make decisions, meet demand, and respond to customers. The Q2 2016 issue of Digitalist Magazine unpacks what it means to be a Live Business.

Our cover story, “Unlock Your Digital Superpowers,” explores how companies are using digital processes driven by algorithms to address customer needs in the moment and create new business opportunities. Another feature, “Social Gets Its MBA,” explains why companies should embrace social media in their fundamental business processes, not just in marketing, to raise employee productivity and improve the customer experience. The ultimate goal for a Live Business is to deliver what customers want at exactly the right time and place. Our final feature, “Personalize, Don’t Traumatize,” warns of the danger of misjudging relationships with customers and offers companies ideas for preserving trust and building loyalty.

The difference between thriving in the legacy knowledge economy and thriving in the new digital economy is the speed at which companies can act on data from all sources. This issue of Digitalist Magazine will help you to set the pace.

Other highlights from the Q2 issue, available online:

  • Digital Transformation Lessons from the Navy SEALswinning in today’s complex environment requires a different kind of leadership – whether it’s on the battlefield, or in business. Chris Fussell, former Navy SEAL and managing partner at McChrystal Group offers insights learned in Iraq, translated for corporate work settings.  

  • Luis Iván Cuende: Bitcoin Blockchain Entrepreneur – Stampery CTO and the youngest on Forbes 30under30 list, Cuende is profiled in the Creators column for disrupting a centuries-old business process – notarizing and certifying documents – using Blockchain technology.

  • Virtual Reality: Perception vs. Reality – this column explores three (mis)perceptions of VR – It Won’t Be Real For Years; Gaming and Marketing Are All it’s Good For; We’re On a Slippery Slope to Mind Control.

  • Social Gets Its MBA – this feature explains why companies should embrace social media beyond the Marketing Department, and embed it into how they do business.

Digitalist Magazine, Executive Quarterly is free to download for smartphones and tablets from the Apple App Store and Google Play. Digitalist Magazine, Online Edition ( is an always-on companion to the Executive Quarterly, with the latest news, analysis and research focused on the emerging digital economy.