Much recent economic efficiencies have come from economies of scale and specialization of labour. http://en.wikipedia.org/wiki/Thomas_Robert_Malthus but at what point is there diminishing marginal return. The more people we have the more tasks can be broken down into smaller and smaller units. Engineering goes from becoming a craft to an intellectual production job by automating it though work processes. This drains the creativity out of engineering until it becomes a soulless cog in the corporate machine. But the corporate machine is an artifact of the past. The more complex the work process become and the interfaces between disciplines there are, the more disconnected the people at the top become with what people do on the ground floor. When corporations become too large, the job of the person at the top becomes less and less about making specific business and design decisions and becomes more about managing the culture which fosters the success of the company. A corporation becomes a cultural entity who's success is dependent upon not only the fundamentals of it's business but also on how well the corporate culture adapts to the technical and market realities. When this culture fails to promote good decisions the corporation fails and some times with drastic consequences that extend well beyond the company itself. Corporate cultures are directed from the top down but at each level, from management to the ground floor their is further direction and a unique response. These responses aren't always positive. All companies have a cultural momentum and trying to change company culture to quickly can foster negative attitudes which will hinder the success of the company. Hence, to some extent corporations are inflexible and slow to adapt. Cultural change often comes though fads. Fads are ideas which quickly propagate. Successful fads often provide people with what they think are easy answers and they are believable because they have sufficient commonality with the ideology of the social groups though which the fads propagate. Corporations embrace the fads as the new paradigms of success. Well a fad may embody some collective wisdom, it can also embody collective myths. Fads hider flexibility because they are bound to much common ideology. Additional because fads often oversimplify complex problems when taken to the absurd can have drastic results where people forgo common sense choices in the name of strictly following corporate policies and ideology. Therefore while larger and larger corporations can better tackle larger enterprises by greater specialization and division of labour as their size increases they become harder and harder to mange, more ridged and slower to adapt. Large inflexible entities are the opposite of what we want in an adaptive innovative economy. Not only do these corporations hinder flexibility though their size but they create large barriers to entry for enterprises which are capital intensive. There will become a point where this top down style of corporate government will become too unwieldy to handle the scale of future enterprises. Corporation size is not the only bottleneck to future productivity. Our educational model is severely outdated as well. We still heavily promote the institutions of university which are based on giving a broad educational foundation. This approach may help to provide innovation but it does not make people immediately useful in the highly specialized corporate world and this education comes to both students and governments at a great cost. Additionally, greater specialization and division of labour requires people living at more and more densely populated urban environments. As people cram tighter and tighter into these areas the cost of living continues to increase and consequently the value of the specialized labour must also increase in proportion to avoid diminishing return. These increased costs are the cost of transportation, housing food and entertainment. In conclusion, in order to counter the the diminishing marginal return of economies of scale it is necessary to rethink many of our economic systems. The systems we must rethink include corporate government, education, housing and transportation.