Summary: The Invisible Continent

Review and Analysis of Ohmae's Book

BusinessNews Publishing

• Publisher: Must Read Summaries
• Year: 2016
• ISBN:
  9782511016657
• Topic: Business
• Subtopic: Management
• Index: Business

The must-read summary of Kenichi Ohmae's book: `The Invisible Continent: Four Strategic Imperatives of the New Economy`.

This complete summary of the ideas from Jenichi Ohmae's book `The Invisible Continent` shows that the discovery of a new continent has always created substantial opportunities to create wealth. According to Ohmae, the same opportunities are arising today, not because of the discovery of a new physical continent but due to the emergence of an “invisible continent” transcending physical and national boundaries. In his book, the author discusses the four dimensions that influence the new economy and how their interconnection must be understood and taken into account. This summary will provide you with in-depth knowledge on each of these dimensions and enable you to move forward with confidence.

Added-value of this summary:
• Save time
• Understand key concepts
• Expand your business knowledge

To learn more, read `The Invisible Continent` and discover the key to successful business in the 21st century.

Summary of The Invisible Continent (Kenichi Ohmae)

1. The Concept of an Invisible Continent

Main Idea

Over the past 15-years, the world has moved noticeably into the realms of a new economy which is characterized by new rules and dimensions. The central challenge of business in the 21st century is to find effective ways to integrate the old economy with the new, without losing the benefits of either.

Supporting Ideas

Even without realizing it, most consumers already do business everyday in the invisible continent. Specifically, they buy local products and services. They also buy products which are made with components manufactured anywhere in the world at the lowest possible prices. Often, those purchases have been researched using the Internet – a computer based information network. And finally, they invest their retirement funds in companies which enjoy soaring market valuations in anticipation of future profitabilities.

All of these transactions either take place in or are strongly influenced by a business environment which does not exist on a physical map. The four key dimensions of the invisible continent are:

1. The Visible Dimension
   The economic activities of the “old world” or “real world” businesses. The more activity there is in other dimensions, the more consumer demand there is for the traditional locally produced products and services.
2. The Borderless Dimension
   The preference of consumers to buy the highest possible quality goods and services at the most competitive prices available – compelling companies to source components anywhere in the world where they can be produced efficiently. (And the ability of individuals to invest their own funds in any country they choose without restriction).
3. The Cyber Dimension
   The enabling technology of the Internet – a seamless combination of computers and communication technologies which can deliver information and electronic services anywhere in the world on demand.
4. The Dimension of High Multiples
   The unprecedented leverage – in terms of borrowing power or the equity market’s P/E ratios – awarded by the markets to companies which are actively staking out new territory in the invisible continent. These multiples are based on anticipation of future earning power.

A sound strategic approach in plotting a corporate strategy for extracting the greatest possible returns from the invisible continent is to keep in mind the old and the new economy have completely different operating rules. Specifically, the four key characteristics of the invisible continent are:

1. Information can be moved easily around the new continent, across any national or corporate boundaries.
   Therefore, companies cannot control their markets. Consumers control the supply and demand chains. Savvy global producers are now acknowledging that fact – and following the lead of their consumers. The transparency of efficient markets is all pervasive.
2. The new continent is easy to enter for anyone who is prepared to abandon their old way of thinking.
   The barriers to entry to the invisible continent are virtually nonexistent. For the next few decades, there will be an intensive battle between those who see the Internet as being too unsafe and unreliable against those who believe the Internet will ultimately embrace all commercial transactions on the planet.
3. Any nation, company, race of people or individual can enter the invisible continent on equal competitive terms.
   The price of entrance is simply to adopt a new way of thinking and behavior. Wealth in the invisible continent accrues to people with different skill sets than in the physical world. Thus, marketability and rewards will flow to new segments of society.
4. The new continent is egalitarian – there is no “elite”.
   Thus, individual values are highly sought after and rewarded in the invisible continent.

In short, staking out a claim in the invisible continent is achievable by virtually everyone on Earth. There will be possibilities and commercial dangers involved in turning that stake into a sustainable source of added value, but that should not discourage an attempt to do so. The rewards for success will be well worth the effort.

Key Thoughts

“In our time, it seems as if no remaining new continents are left to be discovered. The entire habitable world is known: there are no new places to settle. Yet, during the past fifteen years, civilization has changed at a planetary scale more quickly and continuously than ever before. It’s as if some kind of new continent has been discovered – a continent without land. Just as the opening up of new worlds has changed the prevailing assumptions of the old world in the past, the discovery and exploration of the ‘new continent’ is already changing attitudes and ideas about wealth creation and human endeavor.”

– Kenichi Ohmae

“Bus...