Spark Letterpress Pic

I linked to a bunch of stuff lately talking about how small businesses were over-rated and that consumers benefit when more efficient firms can expand and replace their less efficient competitors. True! Yet when firms become more efficient it often means they can do more with less, and specifically less labor which means there could be fewer consumers to take advantage of the efficiencies. I wrote about the potentially horrific endgame of this scenario as well. But I think there is a more complex third way to all this where this all plays out in different directions, as I learned this weekend when my fiancée and I went searching for wedding invitations.
First we went to a larger store in downtown DC. That store showed us a brochure of invitations made by a very efficient firm that allows for some customization within their constraints, and apparently have some sort of agreement to license with vendors. This store, though, didn’t offer any input or very good service, and we didn’t like them.

Then we went to another, smaller store further from that seemed to be primarily the work of one or a handful of people. And the individual we met there showed us the same brochures from the same firm to which the printing could be outsourced! But this individual was much more attentive and engaged then the clerk at the large store, and was much more involved in our ideas and interested in using the capacity of the larger printing firm but not their pre-made designs.

Lastly we met an independent designer in a coffee shop in Old Town Alexandria who did everything from scratch with equipment she purchased herself, and her work was awesome and she was also very engaged with our ideas and questions.

So what we have here, I think, is multiple paths to the way that big, efficient firms can empower smaller, more independent firms. If a centralized firm is doing the grunt work of actually printing the designs, then the economies of scale that often make bigger, more efficient firms more cost-effective even while they are drained of unique personality don’t really apply, since the big store and the little store both get to take equal advantage of those economies of scale. So why would we ever go with the big store that has worse service and no constructive creative input?

Also, to speculate, the totally independent designer was probably able to invest in her own letterpress equipment because the cost of the equipment has dropped drastically relatively recently due to opening new labor markets and replacing human labor with mechanical labor.

So ideas about how to empower small and independent businesses:

· Allow more efficient firms to gobble their competitors (without forming monopolies), thus freeing resources for other pursuits.

· Try to provide things that robots or people very far away can’t provide, like creativity or personalized and engaged service.

· Allow the surplus of cheaper and cheaper goods to not only allow people to collect small benefits from consumption but also to allow them to control the means of production on a smaller scale so they can compete with larger firms.

· Contracting, licensing, and franchising can be a way to combine the economies of scale that only larger firms can achieve with the benefits of smaller firms.

Of course, as long as we remain mired in recession we won’t be able to take full advantage of innovation and efficiencies – for example, I can’t find a link, but I just heard on NPR the other day that a million marriages essentially didn’t happen due to the recession. This obviously represents lots of lost economic activity, as well as lost happiness.