Sustainable Economies of Scale

While the world continues to try to catch the pace of innovation again, many economies continue to struggle. Large economies are leveraging everything to put their economies back on track as Covid-19 continues its variant ebbs and flows. However, two sectors of the world economy will likely struggle most–decadent economies and developing economies. This is because, decadent economies tend to take on the characteristic of many of the world’s developing economies. Unfortunately, some of these economies have empowered there elite classes at the expense of its plentiful locals. It’s not that empowering elites classes is wrong; its just that, it doesn’t get the job done. It’s an awkward strategy that has never truly worked and always left nations vulnerable.

Recovery and growth resources are often captured at the highest echelons of society and industry when it could do more good for the economy and the nation if it were spread over a larger selection of the society. What does this mean? It means that a massive populations cannot participate in wealth generation effectively to propel both the individual and the society forward. This means a Free Trade Agreement can have little to no traction for the economy if the local populace and their businesses are not fully engaged and supported in the process. It means an FTA (Free Trade Agreement) in your domestic market might only mean free movement of goods for multinationals like Maersk Line, Berkshire Hathaway, Volkswagen and a few large local players. It limits the economic options for individuals and society within such an economy.

It matters whether Joey’s Bakery grows into a major food distributor or Aunt Matty’s boutique becomes a national department store chain. Diversification and growth matters. When you think about the economy and business, think about circles and gears in a clock–one pushes the other to go forward. So that means, not only is liquidity for the population important; it is important for that liquidity to come through a number of mechanisms including jobs, small business, investments, national liquidity schemes and property among others. Let’s stop kidding ourselves: there is no pure capitalism or democracy in the world. And at some point, every single nations has had to act on behalf of its people or economy so that its nation could survive.

Imagine if more ordinary citizens had more streams of income? Better access to business and investment support? Imagine if finance and financial information was shared to create bounty, instead of hoarded resulting in national lack. It would be difficult to shut down business entirely or for it to remain stagnant for long. However, because wealth and opportunities in business are not more adequately spread through society, anything threatens to slow its progress.

Small businesses and citizens the world over need better access to information on creating more sustainable lives. Sustainability through business, investments, employment and other societal mechanisms is necessary for the economy of the future. It is what will keep the gears of industry turning. It is a policy that must be pursued through interventions, outreach, funding, education and every tool available to create a thriving economy and a wealthy populace.

Older decadent economies now may also suffer, because they have evolved out of the scrappy models of the past that encouraged their earlier growth through investments in people, small business and education/training. Instead, they are more concerned with maintaining a tiny status quo and sometimes irrational innovations that will ultimately benefit no one in practical society.

Perhaps it is midsized economies and newer, more productive economies developing their own models that the world must look toward in order to survive the Covid-19 economic drag and bounce back to some measure of normalcy. There is an African Proverb that says, “In the time of Crisis the wise build bridges and the foolis build dams.” The question then becomes, are we building bridges of economic prosperity and sustainability that will help the economy recover as well as defend against downturns? Perhaps. Only time will tell who the true innovators are…To borrow from another famous African proverb, I believe, “it takes a village to raise an economy.”

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