Platt Perspective on Business and Technology

Technology as the tide that raises all boats 7 – but often unevenly 4

Posted in outsourcing and globalization, strategy and planning by Timothy Platt on April 8, 2017

This is my seventh installment to a discussion that I initially began as a single stand-alone posting in April, 2012, but that needs reconsidering. I focused in that posting, on a key issue that enters into a determination of how and when change rises to a level of significance so as to qualify as true innovation (see Outsourcing and Globalization, postings 25 and loosely following for Parts 1-6, and Part 1 of that in particular as the foundational urtext for this narrative.)

I began systematically discussing three bullet point issues in Part 5 of this series that I repeat here, as my goal for this posting is to continue that topic-point by topic-point narrative:

1. The level versus uneven playing field considerations of restricted trade, open trade and free trade,
2. And of regulatory oversight as it arises and plays out nationally and internationally.
3. And to reconsider the closing notes to my April 2012 Part 1 posting on this, I also plan on addressing all of these issues at least in part in terms of economy of scale differences, where capacity for economy of scale efficiencies, in and of themselves are innovation driven and certainly in how competing businesses function and are run.

I addressed the first of these points in Part 5 itself and in Part 6 , where I also at least began addressing the above Point 2 and immediately relevant regulatory issues as well. My goal here is to complete at least for now, my discussion of that set of issues and to at least begin addressing Point 3 as well – returning as noted in it to my original Part 1 and its starting discussion of the role of scalability in this context, there.

I focused in Part 6, at least when addressing regulatory oversight and control, on how effectively drafted and enforced regulatory mechanisms can serve to level playing fields and create equality of opportunity through that. The goal of this type of leveling of opportunity is to in effect reward businesses that compete fairly, and through their own efforts – and without market manipulation or use of other related non-competitive advantage that does not arise from their own capacity to perform and meet market and consumer needs, per se. I noted in Part 6 as to how outside participants such as governmental and political forces can create non-competitive and I add specifically anti-competitive pressures favoring individual businesses and groups of them, in that context. And I framed that opening point of discussion in terms of two conceptually distinct economic models, that I initially proposed in Part 5 and which I repeat here for smoother continuity of narrative:

• The tightly correlated economic model: this is predicated on an assumption that overall business and economic actions would only be carried out in accordance with specific highly correlated strategic decision making processes in place in a business, and that all performance results would derive from the efficacy of its own effort.
• And the loosely correlated economic model: this is predicated on an assumption of outside supporting or hindering influence, as for example from government policy and its implementation – and particularly where that is intended to create bias in the marketplace and to skew the playing field that businesses operate in to favor a specific favored few.

To at least briefly put this into a wider perspective of a type that I have more fully addressed in more specifically regulatory system and process-oriented series, I do not include in this series’ discussion, consideration of business performance or market skewing factors such as the development of monopoly power by a business, where that can create its own market governing and even market dominating context and with essentially the same results as would be expected from more strictly outside governmental or other agency intervention. Actually, the two: outside governmental intervention and more strictly from-within the business monopolistic power can be all but impossible to separate from each other in actual practice. One of the key drivers of monopolistic advantage is in fact the development and cultivation of outside skewing support, and both to allow and to enable the maintenance of this type of market-facing primacy of place.

The dichotomy that I raise here between tightly and loosely correlated systems, is primarily offered to address the types of questions and issues that I raised in Part 5 when I briefly made note of the increasingly well known example of how the government of the People’s Republic of China imposes skewing regulatory oversight and restrictions and on both its own domestic business concerns, and on foreign businesses that would seek to operate there and specifically to skew the playing field that they would all operate in – and with governmental protectors and their local within-country businesses joined as closely as any Siamese twins in this.

With that, I explicitly note and acknowledge the potential for both good regulatory oversight and control, and bad and even toxically bad regulatory control – and certainly when such a qualification of value and significance would be determined through the prism of a tightly or loosely correlated economic model distinction.

I recently completed a series of postings that addresses change, and in businesses and in their global context, and within local economies and more significantly across the overall global economy: see Reexamining Business School Fundamentals (Reconsidered), as can be found as Section VII of the directory Reexamining the Fundamentals. I offered that as a seventh year reprise of and response to one of my early series to this blog, available at that same directory page as its Section II: Reexamining Business School Fundamentals. The major organizational thrust of the more recent of those two series was that of change, as occurred between 2010 and the context that I wrote my Section II series in, and 2017 when I write and offered its seventh year timeline successor. Change and in both its slow and cumulative evolutionary forms and in its more disruptively sudden forms enter very significantly into this discussion too and into this series. Here and certainly in this posting, I focus on an economic and a business model distinction, that depending on how followed, shapes the type and nature of this change as it cumulatively takes place.

I am going to continue this overall flow of discussion in a next series installment where I will explicitly address scale and economy of scale issues. I have in effect already begun doing so here, when touching upon the issues of monopolies and their behavior, and I will have more to say about that type of business model there too. But I will also and I add primarily discuss scale of business issues from a more general perspective and for more openly competitive businesses. Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 4, and also at Page 1, Page 2 and Page 3 of that directory. And I also include this in Outsourcing and Globalization – and see that for related material too.

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