Notes
- The model of centralisation, mass production and networked distribution will be replaced by decentralised (or poly-centric) development, greater variety, smaller-scale and more localised production, and shorter supply chains. Economic advantage will be gained from identifying synergies and exploiting economies of scope.
- Synergies occur when two or more things, working together, produce an effect greater than the sum of their individual effects. Synergy means looking at the behaviour of whole systems, not their components separately from the whole.
http://en.wikipedia.org/wiki/Synergy
Economies of Scope, in economic theory, means that the average total cost of production can decrease when a number of different goods are produced together.
- Cost-savings arise when the by-products of one production process are used as the inputs to another.
- Within a company or an economy, economies of scope can reduce risk levels as a result of product diversification. If one of its product lines falls out of fashion or one country has an economic slowdown, the company will, most likely, be able to continue trading.
- Economies of scope can also operate through distribution efficiencies.
