Competing in the Age of AI: Strategy and Leadership When Algorithms and Networks Run the World

T he concept of ‘adaptability’ was introduced by Charles Darwin in the 19 century when he had stated that it was not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change. Though the theory was propounded in the context of biological evolution of species, the same can apply to organizations and businesses that in order to survive must adapt to the needs of the market and demands of the time. In this age of Artificial Intelligence (AI), when algorithms literally run the world, transformation of business models and learning the new rules of the game is necessary for survival. Competing in the Age of AI by Marco Iansiti and Karim R. Lakhani offers an analysis on why it is important for businesses and organizations to adapt to the technological advances in AI. It is an important book for entrepreneurs, investors and the leaders of tomorrow, who dream to be ahead of time by learning new, competitive strategies. In order to explain the central idea of ‘adaptability’ in the digital age, the authors cite an interesting case of collision between traditional and digital operating models with the example of transformation of photography (from traditional to digital) and the subsequent failure of the company Kodak. Despite Kodak inventing the first digital camera in 1975, it could not succeed in the digital race. The authors explain that it was not ‘digital photography’ that killed Kodak but the emergence of the smartphone and social media networks that did so. Digitization or storing photographs in computer files was not the only alternative to traditional photography. With digitization, the demand for sharing photos with friends and family, including through social media, rose and thus emerged a whole new operating model that changed the photography industry completely. Facebook and Google, who went one step ahead to innovate and connect people instead of just storing digital pictures, never really had to compete with Kodak, which was already out of the race due to its lack of adaptability with time and with respect to AI. A successful case of reinventing business with the help of the digital operating model has been highlighted in the book with the example of Amazon, the multinational tech giant (p.9). The authors describe how Amazon successfully changed the rules of competition by harvesting digital solutions, advanced analytics and AI. Strategic Analysis, 2021 Vol. 45, No. 3, 264–266, https://doi.org/10.1080/09700161.2021.1918951