Centralized systems are efficient, not disruptively innovative

The efficient and standardized a system is, the less it is able to revolutionize itself, or the domain in which it exists.

There is an undeniable efficiency that attends a monopoly’s doing what it has been perfected to do, whether that be to turn out a certain kind of film or provide a universal phone service. What such well-oiled machines do not do so well, however, is initiate the sort of creative destruction that revolutionizes industries and ultimately multiplies productivity and value. And where information is the ultimate commodity, the multiplier effect is incalculably great.^[1]

Thus, as centralized systems optimize for efficiency and standardization, they do so at the cost of resilience and strategic agility.

#systems-thinking #antifragility #decentralization #centralization

See also:

• Decentralized systems accelerate innovation
• Centralized innovation is beset by two weaknesses
• Efficiency is purchased by a loss in flexibility