Transient advantage isn’t going away — how AI can help with inevitable inflection points

The field of strategy has long been anchored to the idea that industries exist and that the normal state of things is in equilibrium. Maybe that was the way things were, but it certainly isn’t the way things work now. Instead, we need to be building systems capable of coping with transient advantage. Here are some ways AI can help.

Strategy in the age of Brat Summer

Strategy had its intellectual roots in industrial economics. In that tradition, there are two truths that are taken for granted. The first is that the position within an industry occupied by a firm will determine its fate. The second is that the normal state of things is equilibrium. Change is considered a temporary state that punctuates the norm — hence “punctuated equilibrium.” Innovation is an aberration, not a core economic activity of a firm.

But we all know that today industries are colliding unexpectedly and that competitive advantages can come and go in the blink of an eye. What that means is that we need to figure out how to adapt our strategies to whatever is going on in the moment — I mean, even two months ago nobody was associating Brat Summer with national politics. Two months ago I didn’t even know what brat summer was!