Monday question: Will IBM live longer than Rome?

Cities and companies are both forms of social organization, we organize ourselves in corporations and we organize ourselves in cities. In his recent book, Imagine (2012) Jonah Lehrer recounts some really interesting research on one of the major differences between these two forms of organization. The research in question is on creativity and life spans. It turns out that the creativity in a city – measured in different ways – grows with the size and the concentration of the city. For a company the opposite is the case – as a company adds 10 000 employees a significant reduction in creativity can be observed, Lehrer notes.

There are deep methodological challenges with an experiment like this, of course, but let’s assume for the sake of argument that this was true. What would explain it? Would it be the teleological nature of the corporation as opposed to the city? A corporation exists to accomplish something, it is analogous with goal-directed behavior. A city has no purpose. A city is much more like a daydream.

Lehrer also discussed the necessity and unplanned nature of daydreaming in his book. It strikes me that a city may be our way to daydream together, to imagine and create a non goal-oriented environment for our creativity. A corporation is our way to work together, and as such it becomes more boxed in. It is directed problem solving vs un-directed.

There are other differences too, I think. The loose organization of a city versus the hierarchy and strong ties of the corporation. And, of course, as Lehrer notes: cities almost never die, corporations live shorter and shorter lives. The average life-span of a company is around 40 years, although some are as old as 700 years or older. One important characteristic of old companies, researchers have found, is that they are very tolerant of what happens at the edges and they do not attempt to centralize decision making. I think of recently-turned-100-years IBM and it strikes me that we do not know if IT-companies will be outliers or if we should expect them to perish sooner because of the pace of innovation in our sector.

Here is the Monday question then: rank the following companies and cities in order of how long you expect them to live (remain in their own name and under their own brand) in absolute years – and note the difference in difficulty!

Companies:

  • Microsoft
  • IBM
  • Google
  • Facebook
  • Twitter
  • Oracle

Cities:

  • Stockholm
  • San Jose
  • Berlin
  • London
  • Rome
  • Amsterdam
  • Washington
  • Beijing

Interesting, isn’t it? I will try to figure out what order I believe they should come in, but I can already tell you I find it very hard to figure out both.

Be Sociable, Share!

2 Kommentarer.

  1. Looking forward to reading the book.

    During past decade-or-so, much of regional economics has dealt with labor heterogeneity. There seems to be strong empirical support for the idea that different types of workers benefit from economic density in very different ways. The key part about learning stuff is that the creation of knowledge is inseparable from its diffusion. Workers that deal extensively with knowledge gain much more from economic agglomerations than other workers, and cities are the points where these interactions occur.

    For some reason I have not at all seen as compelling evidence for any of this at the firm level (and especially not for big firms). There, it seems to be much more about the increased division of labor that comes with scaling up production. Personally, I just think that there is so much more room for trial-and-error in cities.

    In a way I feel that Jane Jacobs is getting the last laugh. Again.

  2. It is funny, the book references Jacobs a lot so you may be right there :) — and on the diffusion point Lehrer is very clear about the importance of knowledge sharing and the challenges that overprotective copyright.

Kommentera gärna!