The Value Network Shift

The value network is not a market. It is the entire ecosystem—suppliers, customers, complementors, partners—that defines what is valued, how value is captured, and which organizational capabilities command the premium in a particular competitive landscape. Clayton Christensen introduced the concept in his disruption research to explain a feature of disruptive transitions that purely market-level analysis missed: when a disruption occurs, the value network does not merely adjust. It is replaced. The new network has different participants, different performance metrics, and different power dynamics. Capabilities that were central in the old network become peripheral in the new one, and capabilities that were peripheral—or did not exist at all in the previous configuration—become the source of competitive advantage. The pre-AI value network in software rewarded execution: the ability to translate specifications into functioning code was the bottleneck, and the organizational structure of every software company—team composition, project management, compensation hierarchies—was organized around execution as the