Like in the Great Recession a side effect, or by design, was a banking squeeze and consolidation from small/medium in favor of large players. The chip/ship sup

Like in the Great Recession a side effect, or by design, was a banking squeeze and consolidation from small/medium in favor of large players. The chip/ship supply shortage is again squeezing small/medium in favor of large players. Very little margin and too much optimization/efficiency is bad for resilience. Couple that with private equity backed near entire market leverage monopolies/duopolies/oligopolies that control necessary supply and you have trouble. HBS is even realizing too much optimization/efficiency is a bad thing. The slack/margin is squeezed out and with that, an ability to change vectors quickly. It is the large company/startup agility difference with the added weight of physical/expensive manufacturing. The High Price of Efficiency, Our Obsession with Efficiency Is Destroying Our Resilience [1] > Superefficient businesses create the potential for social disorder. > A superefficient dominant model elevates the risk of catastrophic failure. > If a system is highly efficient, odds are that efficient players will game it. Hopefully that same mistake is not made in the future. It will take time to build up diversification of market leverage in terms of chips for availability. Hopefully we have learned our lesson about too much concentration, with that comes leverage and sometimes a "gaming" of the market. This chip shortage, and all the supply chain problems during the pandemic as well, will hopefully introduce more wisdom and knowledge into business institutions that just because things are ok while being overly super efficient, that is almost a bigger risk than higher prices/costs. Competition is a leverage reducer. Margin is a softer ride even if the profit margins aren't as big. [1] https://hbr.org/2019/01/the-high-price-of-efficiency https://hbr.org/2019/01/the-high-price-of-efficiency