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For businesses, scale isn’t everything. It’s the only thing. Scale confers massive advantages. When you’re manufacturing physical goods, being able to move more materials through an assembly line reduces the unit cost. When you’re serving customers at a burger chain, having 20,000 outlets confers a huge cost advantage over a competitor with 200 units — you reach lots more people and make far more effective use of supply chains, advertising, and other investments. In a highly competitive industry with razor-thin margins, scale is what enables you to grow profits. And for an online or digitized business for which the cost of adding or serving a new customer is close to zero, scale is a necessity. From an economic perspective, everybody benefits from scale, which leads to greater efficiency, convenience, and choice for consumers. Today, you can summon virtually any consumer good, watch any movie, trade any stock from the comfort and privacy of your own home, cheaply and at the click of a button. But there are some indications that scale has its limits and poses significant challenges — to the people running those businesses, and to society at large. Read the original article here

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