I want to point out that the author/speaker points out that efficiency and productivity aren’t the only metrics to consider and in certain scenarios you would want to consider other metrics as well. I personally feel that the examples effect was reduced because the values that led to a loss of productivity in the food processing industry in Japan or the beer making industry in Germany may actually be worth it. But in general they still do illustrate the point he is making about efficiency and productivity arising out of competition.
That being said, the IBM/Microsoft example didn’t really work for me. Because it completely ignores Apple. Apple operates very much like the IBM thst MS vanquished but for the past decade or so it has been crushing Microsoft by any measure of efficiency or productivity. I’d argue that MS still has significantly more innovation than Apple, but is unable to convert that into productivity or efficiency.
And that’s where I think there is a slight hitch in the argument. Competition appears to help with innovation. And innovation often leads to productivity and efficiency. But not always. So if you take the beer example, I would suggest that German beers are likely more innovative than American ones (by which term both the author and I are excluding the fast growing craft beer industry in the US, which is clearly less efficient than the Budweisers the author is discussing) because of the high degree of competition, but in this case, that hasn’t translated into efficiency. I find the author’s claim that this is because of strong localism hard to swallow considering that the effects of competition in other parts of the article are described as strong enough to lead to the demise and conquering of entire continents, but apparently cannot overcome local tastes. Also, the laws argument doesn’t explain why the thousands of breweries within Germany are unable to compete with each other.
It seems to me that in this case American companies are more efficient because they focus on efficiency whereas the German companies prioritize having a distinct taste which disallows productivity gains from mass production and stuff like reducing brewing times by using certain chemicals etc.
Further, the tremendous rise of the American craft beer industry seems to indicate that even Americans, having been exposed to better beers, are valuing less efficient methods of beer production.
So it seems to me the author is making another correlation that does not necessarily stand. Which is a correlation between efficiency and becoming rich.
I think the author describes the conditions under which innovation happens, but incorrectly draws a straight line to efficiency, and continues that line to making money.