James Surowiecki, Viktor Mayer-Schönberger, Thomas Ramge [Archive.org URL]

It’s easier than ever to enter into, and successfully monitor, partnerships, and to outsource even core corporate functions to outside players. Intermediaries and brokers are less important. As a result, the transaction costs of doing business outside corporate walls are falling, which means that the economic case for the traditional big corporation (which exists in large part because of its ability to coordinate production with a minimum of transaction costs) is getting weaker. […] This means that markets are becoming more important than firms, and the traditional corporation is at risk of becoming obsolete.

If the advent of big data clears the way for small companies to shine, though, some very big players will continue to enjoy advantages: the companies that are the gatekeepers to all that data. There’s a positive feedback loop at work in the data economy. The more data you have, the more AI can learn to make your algorithms better. The better your algorithms are, the more likely it is that you’ll deliver what consumers are actually looking for. […] This is the great paradox.

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