Definition
Concentration is the strategic grouping of resources, capabilities, or authority in a single location or node.
Why It Matters
It maximizes efficiency and execution speed, but increases single-point-of-failure risks.
Core Concepts
- Diversification as Safety: Catastrophes (pandemics, floods, wars) are usually localized. Global trade allows a society to draw on regions that are not currently affected by a crisis.
- The Concentration Risk: Concentrating production in a single region (or country) makes a system vulnerable to a single point of failure (e.g., the US infant formula shortage caused by problems in one factory).
- Mobile Defense: Free enterprise and trade act as a “mobile defense,” quickly rerouting resources to meet unforeseen spikes in demand (e.g., perfume makers switching to hand sanitizer during COVID-19).