[Upcoming] ResWORK Seminar - The Runtime Revolution: Rethinking Value, Technology, and the Firm
About the Talk
Modern social science was built for a world of scarcity. Its theories of value assume diminishing marginal utility, its theories of technology assume replication of predetermined outputs, and its theories of the firm assume organizations exist to economize on the frictions of exchange. Generative computational systems challenge each of these foundations. They create value through abundance and contextual generation; they instantiate unique outputs at runtime rather than replicating fixed designs; and they produce surplus value from unanticipated recombination that existing organizational forms cannot fully capture. This lecture develops new theoretical foundations for understanding economic order in the age of generative machines, arguing that the runtime revolution — the shift toward systems that generate value through contextual instantiation — requires fundamental reconceptualization across three domains. First, I introduce the Three Flips as the technological transformation underlying this revolution. The Digital Flip shifts the logic of technology from scarcity to ubiquity. The Organic Flip introduces indeterminacy by deferring value determination until runtime, creating vast combinatorial spaces of heterogeneous resources. The Semantic Flip enables recombination at the level of meaning rather than syntax, so that components combine in unanticipated yet coherent ways. Second, I develop a theory of computational value that addresses a possibility absent from existing demand theory: individual-level increasing marginal utility. Because generative systems adapt, learn, and contextualize, successive interactions become progressively more valuable — not because the user changes, but because the good itself evolves. This is not automatic; it must be actively produced through deliberate design. Third, I argue that generative externalities necessitate a new theory of the firm. Transaction costs gave rise to hierarchies; network externalities gave rise to platforms. In the generative economy, the firm exists to produce the increasing marginal utility that the three flips make possible but do not guarantee — and to capture the surplus value from semantic recombination that no designer anticipated and no contract specified. Together, these reconceptualizations open a broad theoretical and empirical agenda for understanding how generative machines transform value, technology, and the firm.
This seminar will be of interest to faculty, researchers, postgraduate students, and practitioners working in or exploring generative AI, information systems, innovation, strategy, organization studies, and the changing nature of value creation in the digital economy.
About the Speaker
Youngjin Yoo is Professor of the Information Systems and Innovation Faculty Group in the Department of Management at the London School of Economics and Political Science. He serves as the Academic Director of LSE Lifelong Learning Digital. He is globally recognized as a leading expert in digital innovation, integrating insights from technology, economics, and design to develop influential and practical frameworks such as the digital-first strategy, digital value loop, and experiential computing. His research has been widely published in premier scholarly journals including MIS Quarterly, Information Systems Research, Organization Science, and Communications of the ACM, and his work on Samsung has also appeared in Harvard Business Review. Professor Yoo is highly sought after by corporate leaders around the world for strategic consulting and executive education. Through initiatives like xLab at Case Western Reserve University, he has guided numerous American firms, such as Goodyear Tire, Penske, Sherwin Williams, Progressive Insurance, Key Bank, and others through digital transformation and AI strategy development. His extensive industry collaborations include advising Samsung’s Corporate Design Center on digital strategy, partnering with leadership at LG Group for digital innovation thought leadership, and spearheading digital transformation at University Hospitals in Cleveland, where he led a strategic partnership with Samsung Digital Health. He also co-founded Halo Harbour, a privacy-preserving, decentralized, AI-enabled digital service platform.