Economies of Scale in Biology 🐘 and in Businesses 🏗

Economies of Scale in Biology 🐘 and in Businesses 🏗

I am currently reading a 📙 book titled "Scale" by Geoffrey West who draws a parallel between how organisms and buisnesse/economies/cities grow and evolve.

The following ideas are taken from that book.

🐘 Elephants are roughly 10,000 times heavier than 🐀 rats and they have roughly 10,000 times as many cells.

So, how much energy ⚡ do you think the elephants would need to stay alive compared to that of rats?

If you think linearly, you would say, 10,000 times what the rats need.

But in reality, the change in energy needed as per the change in size of the animal doesn't go linearly.

For elephants to stay alive, they only need 1,000 times the energy needed for rats, even though elephants are 10,000 times larger than rats.

This represents extraordinary economies of scale as size increases, implying that the cells of elephants operate at a rate that is about a tenth that of rat cells.

Businesses also operate in a similar fashion as their size increases. With an increase in sales, the per-unit cost declines as businesses become more efficient in using their resources. This is called economies of scale. For instance, if revenue increases by 100.0% over the years, the associated cost increases by less than 100.0%.

Similar to how scale works in animals.

If an animal is twice the size of another 😸 ↗ 🐶 , scaling law says that the metabolic rates (the amount of energy needed to stay alive) don't double but, in fact, increases by only about 75%, representing a 25% savings with every doubling of size.

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