Scale, scope and entrepreneurship

George Bitros ()

Microeconomics from University Library of Munich, Germany

Abstract: To exploit the economies of scale and scope in multi-product technologies, enterprises in advanced capitalist countries grew in the last 150 years in three directions. By substituting in the place of traditional entrepreneurs professional managers, they developed organisational capabili-ties to co-ordinate effectively activities that were widely dispersed geographically and function-ally. They promoted rapid innovation by resorting to systematic Research and Development ef- forts. And, finally, they enhanced control over their markets by introducing innovations whose application required large-scale investment. In the course of these transformations the material standards in the respective countries rose to unprecedented levels. But simultaneously they led to losses in market co-ordination be-cause these transformations increased market imperfections. As a result the economies of scale and scope appear to be negatively related to the ratio of co-ordination to innovation in the econ-omy. Hence, to the extent that policy makers strive to achieve the priorities of citizens, they are advised to allow for the implications of this relationship to the best of available information.

Keywords: Entrepreneurship; co-ordination; innovation; economies of scale and scope. (search for similar items in EconPapers)
JEL-codes: D1 D2 D3 D4 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2004-11-22
New Economics Papers: this item is included in nep-ent and nep-mic
Note: Type of Document - pdf; pages: 17
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Chapter: Scale, Scope and Entrepreneurship (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpmi:0411004

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