How do the world’s most successful tech firms build their valuation from the ground up? And how do they survive as technology changes? For more than 40 years, David B. Yoffie has examined questions like these, tracking the way technology transforms the rules of competition—from the rise of the personal computer to today’s revolution in generative AI.
A Baker Foundation professor and the Starr professor of international business administration emeritus at Harvard Business School (HBS), Yoffie studies strategy in technology-intensive industries, exploring how companies can anticipate disruption and seize emerging opportunities. He has authored more than 10 books, contributed to publications such as the New York Times and the Financial Times, and written more than 200 scholarly articles and case studies.
1. What do you research and teach at Harvard?
When I started at Harvard in 1981, I was researching international trade in declining industries. After a couple of years, however, I reached a shocking conclusion: there was no future in studying declining industries! I switched to studying international trade in semiconductors. That research generated an opportunity to join the board of Intel in 1989, where I served as director for 29 years.
My research and teaching evolved into focusing on strategy for technology-intensive businesses, from computers to software to digital communications. For most of the last 20 years, I have taught a popular MBA course called Strategy and Technology that gives me opportunities to explore new technologies, including generative AI.
2. How do you manage to stay on the cutting edge when technology evolves so rapidly?
Roughly every 10 years, a new technology paradigm emerges to challenge the existing order. In the 1980s, it was the personal computer; in the 1990s, it was the internet; in the early 2000s, it was social networks and smartphones; in the 2010-20 period, it was cloud computing and platforms; and this decade’s paradigm shift has been driven by generative AI. During each transition period, I usually start by doing case studies, developing field cases in cooperation with management. In the last few years, I have written new cases on companies, ranging from foundation models, AI agents, and robotaxis to quantum computing.
3. How is generative AI reshaping companies’ strategy right now?
Generative AI, like any new technology, takes time to embed itself in big companies like Apple, Intel, and Microsoft. I often remind my students that Marc Andreesen, the founder of Netscape and one of Silicon Valley’s most prominent venture capitalists, laid out his vision for the internet to us in 1996 when we were studying his company. He was absolutely right about almost everything except for the time frame: his vision for the next five years took 20 years to be realized.
I expect a similar pattern today. Over the next decade, generative AI should help firms drive differentiation, but in 2025 it is largely being used to reduce labor costs with chatbots, and to accelerate coding. In large corporate settings, the roughly 95 percent accuracy of most GenAI models is not good enough for mission-critical projects.
4. Firms with a strong digital presence can now shift their market position almost overnight using algorithms and quick online changes. Has the boundary between long-term strategy and short-term tactics effectively collapsed?
The tech world has always operated on a different time horizon for strategic planning than the traditional world. Railroads, for example, think about 50-plus years in the future for laying new tracks. But at Intel during the early internet era, management would revisit its long-term strategy every six months to ensure that short-term tactics were consistent with new information. The same is true today. The challenge is not to get caught up in the hype. Innovation is so rapid that the management world gets overexcited by every new invention— for example, agentic AI—even when those inventions are not ready for prime time.
5. What advice would you give companies to stay competitive in a world where everything is changing faster? (And, on that note…is everything changing faster, or does it just seem that way?)
The world is changing faster. Today we have infrastructure—PCs, smartphones, data centers— and more tech-savvy users who are willing and able to adopt new technologies two or three times faster than the last technology. ChatGPT has 800 million users in just three years. It took almost twice that long for the smartphone to hit those numbers.
In today’s environment, you have to develop a point of view and commit to change before the data is available. You can’t wait for the uncertainty to resolve or for the engineering team to design the “perfect” product. Once the fog lifts and the future is clear, it will be too late. If you want to lead change, you must act early with conviction and commitment.
