ReD Long Read – Beyond Network Economics
From Phenomena by ReD Associates
October 17, 2025 · 19 min · Season 4 · Episode 1
About this episode
The episode discusses the limitations of Network Economics and introduces the Cultural Dividend as a new framework for understanding value creation in business.
Network Economics has dominated business strategy for 40 years. But what happens when important anomalies challenge this theory? Take TikTok surpassing Instagram in user engagement despite a smaller network, or Hermès commanding a market cap 17X its revenue. These successes can't be explained by network size alone. In our piece, "Beyond Network Economics", co-authored by ReD and leading strategy thinker Roger Martin, we introduce the idea of the Cultural Dividend and propose an update to the leading theory of value creation. The Cultural Dividend proposes that a network's true value lies not just in its size but in its ability to nurture a thriving community, measured across different dimensions. To win in today's landscape, we propose that leading companies become expert cultivators of culture, not just accumulators of users. Read by ReD's editorial director, Matthew Janney.
People in this episode
Guest: Roger Martin
Topics covered
- Network Economics
- Cultural Dividend
- business strategy
- value creation
- community
Keywords
- TikTok
- Hermès
- user engagement
- market cap
Mentioned in this episode
Books & works: Beyond Network Economics
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