Wednesday, May 15, 2013

Wealth of Nations: focus and trade?

From the beginning of the Wealth of Nations, Adam Smith argues that prosperity follows from specialization and trade.

So many people giving advice for those who seek to build companies have used a simple word: focus.

Is this related to the idea Adam Smith was trying to get across?

In his examples, focus led to many efficiencies:
  • No time is wasted changing tool sets
  • Focused attention can lead to invention of faster methods
  • No time is lost learning the task
  • Capital is used efficiently rather than accumulated and allowed to sit

Outside of his examples, there are other benefits:

  • Focus involving many people can allow benefits to accrue from focused communication
  • Focus leads to branding or efficiency of communication

I do have a question: the most focused or specialized tasks in his examples are all automated now.  With automation becoming simpler and less expensive, does Adam Smith's view on the value of extreme specialization need to be adapted?

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