4 ms·

I don't know if it's accurate to say that power plants and jet planes can't be done by small companies. Instead of one big company, the work could be split amon

I don't know if it's accurate to say that power plants and jet planes can't be done by small companies. Instead of one big company, the work could be split among a number of smaller companies. I don't know the history of Boeing or the major powerplant constructors, but I'd guess that a lot of them have formed over time from the consolidation of smaller companies.

alnayyir 17y ago
I think the issue is cost reduction and margins. They have to run things a bit thin. Partially why they get so hungry for gov't contracts.
hga 17y ago
Yeah, but that comes with its own costs, e.g. some of the Dreamliner's delays are due to coordination problems with the many subcontractors who are making much more of this plane than has previously been the pattern with Boeing. That's only a part, the new type of construction (composites), at least at this scale, is a factor as well. But there's no denying that adding communications costs hurts a lot in big (well, any size of) projects. And if your history supposition is correct, why did the smaller companies combine?
rdl 17y ago
Ronald Coase (one of the top 10 economists ever) has a paper about this: firm size is related to factors including communication complexity. http://en.wikipedia.org/wiki/The_Nature_of_the_Firm http://en.wikipedia.org/wiki/The_Nature_of_the_Firm http://en.wikipedia.org/wiki/Ronald_Coase http://en.wikipedia.org/wiki/Ronald_Coase There are big problems I'd like to solve (cheap space launch optimized for LEO satellite constellations, nuclear power), but since firm size for those problems right now is high, I'd rather work on less-interesting problems which can be more readily addressed by startups, at least until technology advances to let <100 person companies work on the big problems too.

4 ms·

I don't know if it's accurate to say that power plants and jet planes can't be done by small companies. Instead of one big company, the work could be split amon

by loganfrederick 17y ago

alnayyir 17y ago
I think the issue is cost reduction and margins. They have to run things a bit thin. Partially why they get so hungry for gov't contracts.
hga 17y ago
Yeah, but that comes with its own costs, e.g. some of the Dreamliner's delays are due to coordination problems with the many subcontractors who are making much more of this plane than has previously been the pattern with Boeing. That's only a part, the new type of construction (composites), at least at this scale, is a factor as well. But there's no denying that adding communications costs hurts a lot in big (well, any size of) projects. And if your history supposition is correct, why did the smaller companies combine?
rdl 17y ago
Ronald Coase (one of the top 10 economists ever) has a paper about this: firm size is related to factors including communication complexity. http://en.wikipedia.org/wiki/The_Nature_of_the_Firm http://en.wikipedia.org/wiki/The_Nature_of_the_Firm http://en.wikipedia.org/wiki/Ronald_Coase http://en.wikipedia.org/wiki/Ronald_Coase There are big problems I'd like to solve (cheap space launch optimized for LEO satellite constellations, nuclear power), but since firm size for those problems right now is high, I'd rather work on less-interesting problems which can be more readily addressed by startups, at least until technology advances to let <100 person companies work on the big problems too.