The use of software is not new. The core algorithms that underlie much of what Mr. Iansiti and Mr. Lakhani call artificial intelligence have been around for decades. There is no question that the increased availability of computing power and data has further empowered these technologies. But even so, the benefits of network and learning effects in many cases are subject to the same diminishing returns — or even diseconomies of scale — as traditional business models. Once Uber or Lyft have attracted enough drivers in a city to deliver a car in three minutes, there is no incremental benefit to attracting more drivers. And over the years, many social networks have collapsed because they attract too many of the wrong kind of members.

Image Credit... Harper Collins

A more balanced view of the effect of the explosion of data and connections generated by the digital networks can be found in “The Business of Platforms: Strategy in the Age of Digital Competition, Innovation, and Power.” Michael A. Cusumano, Annabelle Gawer and David B. Yoffie — three business professors — examine a broad range of factors that impede most markets from becoming winner-take-all.

They argue that “digital technologies have been creating more opportunities across the board for network effects” and other valuable attributes not typically available to conventional businesses. But the overall effect varies greatly. That is because advances in digital technology have significantly lowered “the initial cost of market entry” and have made switching from one platform to another much easier. As a result, the digital revolution has “both lowered as well as raised entry barriers into many industries.” Thoughtful strategic analysis, in other words, requires an assessment of the net impact of these competing influences.

Despite their differences in perspective, both sets of professors share similar concerns regarding the ethical and regulatory implications of those digital platforms that come to dominate markets. “Competing in the Age of AI” suggests “collaborative structures and approaches” to regulation while “The Business of Platforms” emphasizes the need for “pre-emptive” self-regulation and curation. At least implicitly, both books suggest that the current crop of leaders has fallen short in their efforts to achieve growth without abusing market power. As a result, “a new kind of managerial wisdom” will be required to realize the full promise of this new technology.

“We need to choose a next generation of leaders,” the otherwise mild-mannered “Business of Platforms” concludes in reference to both corporate executives and politicians, “with a better understanding of how platforms and digital technologies can impact society and the global economy.”

Jonathan A. Knee is professor of professional practice at Columbia Business School and a senior adviser at Evercore. His latest book is “Class Clowns: How the Smartest Investors Lost Billions in Education.”