Real grass roots
Posted by aogThursday, 28 June 2007 at 22:39 TrackBack Ping URL

I was thinking about the continuing problems at Airbus, and how this could lead to a single global manufacture of large civilian aircraft. I expect many people to panic at the thought, but I suspect that it won’t matter. Given things like the emergence of micro-jets, controlling the construction of large aircraft may turn out to be as economically significant as being the only manufacturer of super computers in the 1980s.

The style of technology for this century is going to be mass technology, lots of small things adding up to a big, distributed thing. The Internet is the archetypical example. Other major fields of activity are gong to experience similar shifts to smaller but far more numerous instances. Control of large but few instances will become increasing irrelevant, making monopolies of less and less economic significance.

Another effect will be that it will also become increasingly easy for groups of people to combine their efforts. An archetypical example of that is group weblogs, where small groups of people can easily create the equivalent of magaizines. This will be not only technologically easier but economically easier. Previously, a magazine was a major economic risk because one had to purchase a few very expensive items to make it work. When one can combine pre-existing assests, each of which is not particularly expensive, then not only is the barrier to entry lowered but the marginal cost becomes much lower because the combined items can be ones that would be purchased in any case. E.g., the computer and network access necessary to contribute to an on-line magazine don’t become useless if the magazine fails. This makes the effective marginal cost per participant even lower than raw numbers would indicate. I don’t see any indication that this trend won’t continue for the forseeable future in an increasing variety of human endeavors.

Comments — Formatting by Textile
Bret Friday, 29 June 2007 at 00:07

Perhaps so (though I’m not yet convinced).

But, if so, that’ll be tough on the ownership society.

Boeing requires lots of capital and makes lots of profits (sometimes). As a result, it has shareholders.

Things like blogs require no capital and make no or little profits. As a result, they don’t have shareholders.

Thus, from your prediction it follows that there will be fewer and fewer entities in which it’ll make sense to own shares.

Annoying Old Guy Friday, 29 June 2007 at 08:22

Convinced of what? I tossed arrogant predictions about with wild abandon there.

It would seem to follow from my main premise that less and less of the overall economic activity will be worthy of owning shares in as we know that today. However, there are two things to keep in mind in that regard

  1. Although the proportion of worth holding stock in activities may decrease, the absolute number might well increase, just more slowly than the overall economy.
  2. “Share holder” might well evolve to mean those who contribute their personal resources, rather than the “money for legal status” style we have today.

Open source projects might be a good place to look for future models. It is an emerging trend to allow outsiders to bid on new features, a trend I think will grow.

cjm Friday, 29 June 2007 at 10:38

larger only makes sense when economies of scale are a factor, or other environmental factors make largeness a positive attribute. nature is the ultimate engineer, and nature likes co-operative communities of specialized ‘actors’ (like our own fine bodies). once molecular fabricators become available, we can all have exact copies of the mona lisa, and we can all own whatever devices or tools we want. the trend is quite clear, if the timeline isn’t.

glad to see you back, aog, how did the trip go ? :)

Annoying Old Guy Friday, 29 June 2007 at 11:47

cjm;

I expect to continue to see very large scale projects. It is the style of the largeness I expect to change, from the sort of monolithic, fixed scale projects such as the 767 Dreamliner to more distributed, incrementally built projects such as the blogosphere.

I will write a short post about the trip.

Bret Friday, 29 June 2007 at 12:51

I’ve now thought about this more (perhaps I should think before I comment - nah), and I don’t see manufacturing changing all that much from the large monolith to many small entities. First, a 767 is more fuel and otherwise operationally efficient per person than a microjet (at least for significant distances). Second, microjets still require quite a lot of tooling and infrastructure to manufacture. As volumes go up, so do up front tooling costs if the units are to be made as cheaply and profitably as possible. Third, I think we’ll always have a need for monster machines to dig holes and lift huge things to build bridges and stuff. I think that knowledge and distributed systems can only go so far in displacing manufacturing of actual stuff (as opposed to entertainment, information, etc.).

Robert Duquette Friday, 29 June 2007 at 19:33

I agree with Bret. There will continue to be applications for mega-sized solutions. Look at oil tankers and container ships. The micro-jets will merely complement the macro, opening up new niches.

Annoying Old Guy Saturday, 30 June 2007 at 06:54

Bret;

I wouldn’t bet on the 767 being more effecient in general per person. Micro-jets will, if nothing else, have on average fewer empty seats and can go more directly. The same argument you make is made for public transportation, but people seem to prefer transportation as individualized as possible anyway.

Mr. Duquette;

I don’t think large manufacturers will disappear, but I do think that they will become relatively minor players, rather than the “commanding heights” of industry. I.e., that even if Boeing ends up as a de facto monopoly, it will not be sufficiently economically significant to be a concern. Do think that is not the case?

Robert Duquette Saturday, 30 June 2007 at 10:05

AOG That’s a fair assessment. I think that your argument works as well for the manufacture of jets as for the consumption. Why can’t the manufacture of such big ticket items be handled by consortia of networked companies rather than one monolithic corporation? That way the partners in the consortia can maintain product lines in higher volume, less risky markets like micro jets or automobiles, for that matter.

Annoying Old Guy Sunday, 01 July 2007 at 13:48

That’s already an emerging trend. For instance, Cisco, my former employer, has been big on “ecosystem” business since before I started working there. That means that Cisco considers itself as the head (and leader, obviously), of a de facto consortium of companies that in toto provide network infrastucture.

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