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Return on assets is dwindling

In The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion, +John Hagel and +John Seely Brown observe that return on assets, which measures how efficiently a company can use its assets to generate profits, has steadily dwindled to almost a quarter of what it was in 1965. They argue that ever-improving digital infrastructure and social networks are causing profound social change that increases competitive intensity. Since this turbulent environment shows no signs of stabilizing, they say, the only sustainable competitive advantage is the rate at which a company can learn.

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Taken on November 20, 2011