From the pin factory to the iPhone

Templeton Fellow Professor Sir John Kay described the changes in production and business organisation since the days of Adam Smith, speculating on how a modern Scottish economist might describe the nature and causes of the wealth of nations.

In 2023, value is more about the result of embedded collective intelligence and less about the result of material content. The iPhone costs fifty times as much per kilo as a pin and is a quarter of the weight and price of the first generation of mobile phones, yet has far greater functionality.

Sir John argued that modern business is defined and differentiated by its capabilities, not production facilities. The division of labour, whose importance Smith so appropriately emphasised, has developed functionally and geographically to which Smith could not have imagined.

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