Re: What Breakthroughs Are Needed to Get 2% Growth For the Next 200 Years?

"Sea Wasp" <seawaspObvious@xxxxxxxxxxxxxxxxx> wrote in message
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Logan Kearsley wrote:
"Mike Williams" <nospam@xxxxxxxxxxxxxxxxxx> wrote in message
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Wasn't it Logan Kearsley who wrote:

"Mike Williams" <nospam@xxxxxxxxxxxxxxxxxx> wrote in message
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I reckon that one of the really big contributing factors in the last 50
years has been the greater availability of credit. This allows money to
move through the economy faster, and end up being counted more than
once
in the GDP calculations.

One breakthough that I hope might happen in the near future is an
improved theory of middle management. In large corporations, middle
management consumes huge amounts of the company's resources but doesn't
seem to achieve very much. I expect that there may well be a way to run
a large corporation in such a way that management operates much more
efficiently.

Or, alternately, the elimination of middle management. Small companies
tend
to act faster and be more productive per capita than large companies,
the
biggest evidence of this being in high-tech startups (with maybe 2-10
people
in the whole company), which seem to act like technology factories
waiting
to be hired or acquired by big companies.
In any area that doesn't exhibit large economies of scale from having
lots
of people work together (which seems to be an expanding category, as
more
stuff is automated), a shift from a boss-employee model to a
client-contractor model could produce some large gains in efficiency &
so
productivity.

That's the sort of thing I'm talking about. Imagine if we could grab the
essence of that and somehow apply it in situations where there are large
economies of scale. Imagine what benefits there would be from having
efficient management in your local Town Hall or the National Health
Service.

There are some problems with any attempt to reduce middle management,
which would need to be overcome:

* The amount of power wielded by an upper manager tends to depend on the
number of middle managers that report to him. Therefore they have a
vested interest in maintaining or increasing the number of middle
managers in their little empire [1].


As long as the function of startups is effectively to manufacture
technology and then get bought by big companies, I suspect there's little
that can be done about that.
If more small companies start maintaining autonomy and hiring themselves
out as contractors rather than accepting one-time buy-out deals, though,
one could have a gradual shift to the new model as large, inefficient
companies simply fail out of the market, in which case no one needs to
worry about properly restructuring them.

The problem is that being either (1) bought out for a lot of money, or
(2)Hitting it big enough to become a much bigger company are the two major
goals of essentially ANY small company. Your model assumes that the things
that get these little companies bought out are a product that can be
regularly sold -- i.e., that they can do whatever it is they do regularly
enough to be regular, moneymaking contractors on it. In general, this
isn't the case; you get bought out because you've got some gadget, or IP
in gadgets or similar stuff, that's in demand or in a market of interest
to the bigger company.

Actually, my model simply assumes that something magic happens which changes
those two major goals.
I don't really know how one would make that happen- I can think of a few
specific examples, but nothing that would turn into a general trend. It is
entirely possible that figuring that out would be even more difficult than
restructuring extant large companies to be more efficient.

Hey, if improving the economy were obvious, someone would've figured it out
already. :)

Small R&D firms -- for the most part, there are exceptions -- don't WANT
to stay small. Sure, they'll gripe about some of the problems of getting
bigger, but in a small firm, you're living on the edge of disaster most of
the time. You don't have enough money to pay a large enough workforce to
deal with emergencies well. You can't support enough of a workload to have
much reserve. In most such companies, the engineers and scientists are
running most of the time to just keep up, and if one or two critical
people quit, get hurt, or otherwise are taken out of action for even a few
weeks, it can throw the entire work schedule into chaos.

Is there any particular reason why you couldn't have plenty of money to
support a larger workforce, and just not *use* it to hire a larger work
force?

Every once in a while you get a small company that finds some kind of
product or service it can provide in sufficient quantity to maintain the
company and not require constant R&D running, and they get a stable,
long-term contract to keep doing whatever that is. This is the kind of
situation you're describing, and it's certainly a nice setup, but it's not
likely to become universal.

I can think of at least one set-up that *might* work on a large scale-
replace in-house programmers (or whatever other job you want to insert that
can be done by one person or a small group of people) with oodles of
contracted programming groups. In the limiting case where one contract group
just stays with one company all the time, it's pretty much the same as being
hired, except that control over a complete project remains with one person
or small group from start to finish, which facilitates payment scaling with
individual productivity, and you don't necessarily have working hours or
office spaces dictated by the client (which should boost productivity all by
itself, at least for creative work, which is what most work is if everything
is else is automated). But, each group also has the option of choosing to
work on projects that are personally interesting, wherever they might be,
which would provide a psychological boost even if that ability isn't
actually exercised.

Sort of like treating programmers (or whatever other creative job you want
to insert) like visual artists who get paid on commission.

-l.
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