Sunday, 13 December 2015

Digital Disruption and Economies of Scale

In the industrial revolution, mechanization and mass manufacturing achieved competitive advantage by concentrating production in large factories thus achieving economies of scale.

In Digital revolution the information technology providers concentrated the computing resources in large datacenters where land & power are cheap. Thus was born the cloud computing.

In Next level, the manufacturing is being disrupted by Digital Evolution of 3D printing and new business models around the CAD and 3D printing. Catching upon the long tail of manufacturing of one of custom product (N=1 R=G) and maintenance of products that does is obsolete and parts not available.

In Future, can we attain economies of scale by aggregating design and product technology knowhow, through a digital platform and creating new business models around it? For example, Recycling, Solar & Bio Power generation, organic Farming.

Why can't this disruptive model be extended to the online commerce? by creating the hybrid commerce model, can we not create a Digital Platform to achieve economies of scale and yet let's the corner shop be independent?

I am evangelising this idea with two startups I mentor, UVAPoint and Kheti Badi.