The future production costs

There has been a theory for enterprise or innovation that the minimum cost of producing a product is equal to the costs of its raw materials and companies should aim to reduce their costs of product closer and closer to the minimum costs. This target is not that impossible to achieve, the field of software and smart device application development seems to have achieved this goal. Though the software development field is very easy to achieve because it does not require continue investment in labour during its selling period, it sets an example for other sectors if AI and machine can replace labor forces to do some repeating jobs, once a product has been design, its production process is a repeating work and is very likely to be done by machinery. Therefore, if this became true, the cost of production would be reduced to its minimum.

From this point of view, I think that in the future, the costs of investment and production would be a combination of a large proportion of lump sum costs and a small proportion of marginal costs for individual production. Machinery and technology development and application would consume a large amount of resources from companies as well as the society. This would increase the risk of companies as they have to pay large amounts of lump sum costs for their productions before they start their businesses. To reduce such risk, it is important to be more specialized and generalized. To be more specialized, the development sector and the manufacturing (production) sector will be more separated, even the sales sector could be separated from these two sectors. Under such circumstance, each sector is only responsible for its individual unique function, this can divide the general risk into many small parts and each individual reduces its individual risk. To be more generalized, I mean manufacturers can produce products for larger ranges of products, designers and developers also need to consider more about their products' compatibilities. 

Therefore, future jobs and investment would be concentrated in the lump sum costs, more and more resources will be pulled into developing new products and machinery.