Digitalization and globalization in a turbulent world: Centrifugal and centripetal forces

• Author: Erkko Autio,Ram Mudambi,Youngjin Yoo
• Date: 01 February 2021
• DOI: http://doi.org/10.1002/gsj.1396
• Published date: 01 February 2021

SPECIAL ISSUE ARTICLE

Digitalization and globalization in a turbulent

world: Centrifugal and centripetal forces

Erkko Autio

1

| Ram Mudambi

2

| Youngjin Yoo

3

1

Imperial College, London, UK

2

Temple University, Philadelphia, Pennsylvania

3

Case Western Reserve University, Cleveland, Ohio

Correspondence

Ram Mudambi, Department of Strategic

Management, Fox School of Business,

Temple University, Philadelphia, PA

19122.

Email: ram.mudambi@temple.edu

Abstract

Research Summary: Digitalization has three funda-

mental characteristics, reprogrammability infrastruc-

tural elementality, and intangibility. Based on these

characteristics, it is transforming how firms organize

for value creation, delivery, and capture. Its intangibil-

ity and infrastructural character largely free economic

and business activities from the constraints of physical

geography like those imposed by transportation and

collocation. Digital communication technologies typi-

cally reinforce the centrifugal forces that favor dispers-

ing the firm's high knowledge activities. Digital in situ

technologies strengthen the centripetal forces toward

concentrating the firm's low knowledge activities. Loca-

tion dependence and product modularity are crucial

moderators for tangible products, while institutional

barriers are important for intangible ones. Finally, digi-

tal technologies increase the resilience of firms during

disruptive events that impose restrictions on the move-

ments of people and goods, as during the COVID-19

pandemic.

Managerial Summary: Digitalization is a general pur-

pose technology on the scale of the steam engine and

electricity, and affects every aspect of business and soci-

ety. It is transforming how firms organize for value cre-

ation, delivery, and capture. Freeing businesses from

Received: 16 December 2020 Revised: 19 December 2020 Accepted: 21 December 2020

DOI: 10.1002/gsj.1396

Global Strategy Journal. 2021;11:3–16. wileyonlinelibrary.com/journal/gsj ©2021 Strategic Management Society 3