increasing return 递增效益
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Tzu-Tung, Huang
Explain in your own way what increasing returns is and what it's not, why it's an important concept for understanding how firms compete well in the knowledge economy, and use a real world example other than those mentioned in the reference to illustrate your points.
Increasing return is a kind of tendency of knowledge products which constitute leader gain more lead but make loser fell more behind. In other words, increasing return will strengthen the power of successful to the winner and make the output consistently transfer in to larger scale benefits than the value of original input. On the other hand, loser will have increased loss since the increasing return become decreasing return and makes the winner take the most of the market.
However, not all the cases that gaining higher output than input called increasing return. The characteristic of increasing return is that it can be extend and increased amount of benefit as well as with consistent long termeffects instead of the short term or temporary benefit from the initial investment. Additionally, increasing return has a future that it will enlarge the role of the advantages of a firm to customers. That is, if an advantaged product or a unique technique of a firm wins the market, the increasing return can support the firm to keep taking the lead and lock the positive image in the market to the customers. In this case, once the customers get used to the product or the technique, they need to pay higher transfer cost in learning, changing and researching to start over getting used to another products. Hence, the customers will stick in the patterns of the firm and hardly to change.
The knowledge economy is the knowledge-based economy. It is the knowledge about know-what,
know-how, know-why and know-who. In short, to a firm, it is further knowing better way to use the materials, human resources and work wisely. When a firm understanding the concept to operate in knowledge economy, the time and material are much more saved since they operate in smarter way to produce the products. In this situation, the most obviously effects can be effectively and dramatically control the budget and decrease the cost. Moreover, the knowledge economy often goes along with the information technology which leads to powerful knowledge sharing in order to generate higher level knowledge of specific industry then to further improve the skills. In short, it is really important to make things becomeeasier, more convenient, cheaper, faster and better.
To forward apply the concept of the knowledge economy, enterprises would introduce management tools to rearrange the resources and restructure the construction of a firm. For instance, the company I worked for used to implement the ERP system to reorganize the entire firm in order to greatly lower the cost and make good use of resources. Also, they bring out a crucial idea of reform the structure of hiring employees which is a concept of turn the human resources cost into investment. They used to not to hire the high level people but more people with lower pay in order to lower the cost. However, they cannot work efficiently and effectively. So, they actively recruit employees with highly educatedin professional field as well as the technical background in order to reach the long term goal of increasing return through the investment into knowledge economy.。
