This is part of my developing lecture series on 21st century thinking. The overall idea is to sketch out — as far as possible — the ways in which western man will change in the upcoming century. I have already addressed some quaint ideas that we have about intelligence that are likely to look foolish in 100 years.
One of the great revolutions of the 20th century was to devote intelligence and creativity to the challenge of living better. This brought us the consumer society that we like to make fun of, but cannot live without. Indeed, I readily confess that I look forward to food shopping each day. I like to shop and I want to shop more!
One of the engines for building the consumer society was the use of economies of scale. It is far cheaper per unit to make 1 million pairs of pants than one or ten or 100. And companies that could “scale” found themselves in an enviable position. It was expensive to create the production facilities and so large entities often were secure in their competitive advantages.
This is changing. It is now clear that as the costs of sharing information fall (due to the digital tools we now have), we can align capital to opportunity more efficiently. We can do “start ups” that “scale”. So far, most of these have been pure digital plays. Like Microsoft, Apple, Google, Facebook, etc. But attempts are being made to leverage the advantages of low cost sharing to trump the big corporate entities that sit atop the non-digital world as well.
this is producing a certain exuberance to scale. And of course, this introduces a volatility to markets that we are just starting to get used to. One thing we are learning from this adventure is that scaling is harder than it appears on the surface. And taking one risk capital, for example, from VC’s is not always a very smart thing to do. Consider the cautionary tale of GigaOm. When you swing for the fences, you often strike out.
Can we reduce risk?`I think so. And I think this will produce quite a lot of interesting thinking in the century ahead. I will peek into my crystal ball next to see what tools we can use!