Why Small Business is Beautiful

by: Ronald C. Weston, AIA, LEED AP In his seminal 1973 book titled “Small is Beautiful,” the late economist and author E.F. Schumacher, promoted a number of progressive ideas about economics, scale, decentralization, and sustainability.  Many of Schumacher’s theories were prescient and inspire respect for small-scale solutions that enhance the triple-bottom-line: people, planet and profit. It is timely to revisit the contributions of Schumacher in 2011, marking his 100-year birthday. People: Schumacher wrote of “a technology with a human face.” He also a advocated “a new direction to technological development, a direction that shall lead it back to the real needs of man, and that also means to the actual size of man. Man is small, and, therefore, small is beautiful.” Were he alive today, Schumacher would likely be amazed to see how information technology and social media have advanced to empower individuals and small businesses to have a global reach. Powerful web-based information technologies have flattened the playing field and made it possible for small, decentralized organizations to achieve big results and compete effectively with much larger businesses. Despite the global age we live in most large business and social organizations urge their people to  "Think Globally, Act Locally" by taking small-scale action in their communities. Planet: Schumacher said, “Small-scale operations, no matter how numerous, are always less likely to be harmful to the natural environment than large-scale ones, simply because their individual force is small in relation to the recuperative forces of nature.”  Well before sustainability became a popular movement, Schumacher recognized that industrial age economics were not sustainable and voiced concern over the rapid depletion of the world’s natural resources. How unusual it must have been in the 1970s for this industrial economist to preach the need for human beings to remain close to the nurturing land in fact and spirit. Among his suggested antidotes to myriad economic and political challenges of the day was his advice that people plant trees. Profit: As an economist, Schumacher was certainly focused on strong financial outcomes; however, he cautioned against the blind pursuit of increased production and short-term profits. Traditional theories about ‘economy of scale’ meant uniformly promoting expansion in production to improve efficiency and margins. Adhering to Schumacher’s principles, businesses and organizations may be better served by increase their focus on achieving “economies IN scale,” by leveraging the inherent advantages of smallness. Dr. Robert W Vossen has stated, “Smaller businesses are more efficient at innovation, which means they produce more innovations for a given amount of R&D than do larger firms.” In addition to being engines of innovation, it has been well documented that small businesses create more new jobs than large businesses. Indeed, all large cap companies and large social organizations can trace their roots to small entrepreneurial origins. In recognition of E.F. Schumacher, I contend we need to think small to achieve big sustainable, profitable results…do you agree? Ronald C. Weston, AIA, LEED AP is an architect and consultant who assists small business and social entrepreneurs with the sustainable design and planning of their built environments.