Economies of scale are quite important. Micro-economic theory focuses more on the case of decreasing returns, that leads to efficient competition. Scale economies are leading to emergence of natural monopolies. One example is related to information technologies but there are also some in classical industries.
Scale economies may exist in cities and they are driving growth; see my paper that includes also this effect: Conference Paper Aggregate and Average Land Rent in Cities
There is a good book by W. Brian Arthur about their role;
"Increasing Returns and Path Dependence in the Economy",
Economies of scale are quite important. Micro-economic theory focuses more on the case of decreasing returns, that leads to efficient competition. Scale economies are leading to emergence of natural monopolies. One example is related to information technologies but there are also some in classical industries.
Scale economies may exist in cities and they are driving growth; see my paper that includes also this effect: Conference Paper Aggregate and Average Land Rent in Cities
There is a good book by W. Brian Arthur about their role;
"Increasing Returns and Path Dependence in the Economy",
I see it this way: Consumer demand is higggggh in the west (North America) especially . With consumption there is more demand . With China now , cheaper goods are available . They have cheap labor etc etc for manufacturing , I guess we are the markets for which they provide .
Again , the equation is not simple when $$$ and trade regulations are enforced . That is economies need not dictate production , they are for consumption (may be wrong conclusion but a realistic one)
Economies of scale exist when larger output is associated with low per unit cost. Economies are advantages which a firm or industry will enjoy when they increase the scale of production. (internal as well as external economies) Internal economies means economies are internal to firm when it expands in its size. It is open only for the firm , independent to the action of other firms and External to the firms which are available when output of whole industry expands.It is shared by number of firms when the scale of production increases in any industry.
Internal economies of scale are of 2 categories - Real and pecuniary
Real internal economies of scale are technical economies, marketing economies, managerial economies and risk bearing economies
Pecuniary Internal Economies happens due to reduction in market price of its in put when input is given in lower price due to purchase in bulk.
External economies of scale again are real and pecuniary. Real external economies of scale represents how a firm is benefited in an industry through technological interdependence of firms. Say for illustration, In textile industry, some firms start specializing in manufacturing thread,some in printing, some in dying,
Economies of Information also is due to real external economies. An industry is in a better position to set up research labs as they are able to gather large resources.
Many industries turn out large waste materials which can be used as input in process of manufacturing (Economies of By-Product) e.g. molasses in sugar industry.
Production has been widened over the years to cover many different areas of wealth creation. In fact wealth creation itself has been subjected to such processes, and simplified through the internet. A room, advertising, an internet site is enough-Time and energy now cover very different things and are more closely allied to skill and sedentary habits. where money is made through reactions only, making money acquires an ease as never before.
Start-up companies cost far less in the present environment than in the past, with lower costs and more immediate and higher returns-supplied with a global audience.
Economies of scale refer to reduced costs per unit that arise from increased total output of a product. For example, a larger factory will produce power hand tools at a lower unit price, and a larger medical system will reduce cost per medical procedure.