Recently I was watching ‘A Beautiful Mind’. The moment of epiphany for John Nash where he propounds a theory improving on Adam Smith is always my favorite scene. A classic case of a simple idea whose time had come.
The statement ‘the best outcomes are achieved when every individual in a group does what is best for themselves AND what is best for the group’ is intuitive and logically simple. How this simple concept altered our understand of economics, finance and business is now a part of lore.
In the same breath, I was recently reading about the evolution of capitalism and the emergence of a sustainable humane version of capitalism as the future. At some level I find both these linked and causative in relation. The emergence of business platforms and social media driven enablement could be the first steps in the emergence of this new economic paradigm.
Small businesses are the cornerstone of any economy, advanced or emerging. By nature these businesses are not highly invested, not dealing in large volumes and inherently not highly scalable. This is either because of the nature of the product or because the market (or entrepreneur) work in a certain manner and are inherently do not scale.
Can John Nash help here? I imagine a platform for small businesses where everyone shares information (on performance, business opportunities, vendors, sellers, buyers etc.) and transact business. This could lead to group behaviors such as formation of collectives and consortia, explore unknown opportunities, reach beyond local regions and benchmark against best practices. Everyone doing what is best for themselves and for the ecosystem they play in.
For something like this to truly work, it needs to be massively embraced and offer levels of privacy, anonymity and confidentiality. Imagining the Small Business segment as a large amorphous organism might actually serve the greater common good and create value.
Begs the question, who bells the cat? Should the government have a role to play? Should this be supported by legislative processes?
I would think, over time, yes. Incremental value creation in the economy needs a very strong, vibrant small business segment which ensures equitable distribution of wealth and democratization of economic processes. The large businesses that form the backbone of stock indices rely on the ability and strength of multiple smaller businesses in some form or the other. The current Covid-19 pandemic might just be the stimulus needed to build the right platform for this key segment.
The interplay of Business Intelligence, Market Intelligence and open competition could actually provide the Swarm Intelligence needed to drive Darwinian evolutionary change in this ecosystem.