In an effort to meet growing housing demand, builders and developers are looking at every new angle of efficiency. However, this article from Inc.com reveals evidence from the Harvard Business school that efficiency can be counterintuitive to innovation.
Every once in a great while, the Harvard Business Review publishes an article that has the potential to redefine how we think about business fundamentals, like entrepreneurism and innovation. The recently-published "The High Price of Efficiency" is just such an article.
What It's About
According to conventional wisdom, innovation disrupts industries. Small, innovative, nimble companies overtake and eventually destroy their dinosaur-like predecessors.
One archetype of "disruptive innovation" is the PC, which disrupted the computer industry that was based around minicomputers and mainframes. Another archetype is the Internet which, well, supposedly disrupted everything.
The underlying assumption behind these archetypes is that innovation creates greater efficiency ("faster, smarter, better") thus propelling small, innovative companies forward at the expense of their larger, hide-bound competition.
There's only one problem: while innovation might (sometimes) create greater efficiency, efficiency itself makes innovation less likely by causing a concentration of profit and power inside one or two companies inside each industry.
Take high tech, for instance. Google, Amazon, and Facebook completely dominate their respective markets to the point that no amount of innovation is likely to disrupt or displace them. Any startup that threatens their dominance is acquired and folded into the monopoly.
It's not just high tech.
