Joel Kurtzman is the founding editor of strategy+business. The author of more than 20 books, he is currently a senior fellow at the Milken Institute and at Wharton’s SEI Center for Advanced Studies in Management. His most recent book is Unleashing the Second American Century: Four Forces for Economic Dominance (PublicAffairs, 2014).
Stanford university economics professor Paul Romer explains how the knowledge economy is creating monopoly power and changing the nature of competition. This stems from the ability of knowledge-based industries to generate increasing returns by capturing as much market share as possible. Unlike traditional monopolies, however, information age giants will face being superseded by new entrants and little danger exists of permanent monopolies -- even in an industry like software.