F >There's a piece by Kevin Kelly called "Network Economics" in the F >latestWhole Earth Review, about how better communications tech and F >changed business practices lower transaction costs and (along with F >competition and the pace of things these days) are pushing down the F >optimum size of businesses. F > F >-fnerd F >quote me
Likewise "The Incredible Shrinking Company" from THE ECONOMIST of DECEMBER 15, 1990.
"Computers were supposed to centralise decision-making and produce ever, bigger firms. They seem to have done just the opposite
Peering into its crystal ball in 1958, the Harvard Business Review said that computers would revolutionise American business. By the end of the 1980s they would ensure that American business would be concentrated as never before. The economy would be dominated by a few giant firms. Within each firm important decisions would be made by a handful of executives with access to the firm's single, big computer.
The exact opposite has occurred. In America the average number of employees per firm has been falling since the late 1960s; but more and more of those employees have a computer on their desk."
DCF
--- WinQwk 2.0b#1165
I think we should be careful here. Yes, the big companies are getting smaller, but that doesn't mean that we're not seeing centralization. You might argue the exact opposite: The economy is becoming _increasingly_ centralized and the computers and automation are allowing the large companies to cut out even more people. Consider some facts. Microsoft and Intel dominate the microcomputer market. The auto market in the US expanded over the last several years because more imports started arriving, but now the global auto capacity is really much too large. That's why Jaguar, Lotus and many of the other brands are now just divisions of the large companies. This will continue to happen as the auto companies merge and cross purchase shares. In the airplane market, Boeing is considering pooling resources with one of its two major competitors, Airbus, so the two can design the next big plane. Yes, there are many small, new companies, but I think this is largely because of other considerations. It is much cheaper for companies to hire contractors than employees. The high cost of benefits makes it easier to shed the people and make them fend for themselves. Plus, the affirmative action and other discrimination laws makes it difficult if not impossible to fire anyone but a young, straight, white man without worrying about a discrimination suit. These are the principle reasons why the corporations don't have many employees.