From Local to Scale: Analytical and Practical Challenges of Scalability

Can local solutions be scaled up to the national, regional or even global level? How do firms manage the transition from small enterprise to large, publicly traded corporations? How is the process of globalization affecting the scale and scope of the nation state?

These questions illustrate the need for understanding complex processes of social change, which conventional social sciences are ill equipped to conceptualize. The methodology that today defines these disciplines assumes, mostly without problematizing it, that social phenomena can be adequately captured by simple relations between independent and dependent variables provided we can identify the right control variables. It is often conceded that causal inferences are difficult, but this proves the point: The whole exercise is about identifying causal relations and statistical tools have grown ever more sophisticated in accomplishing this task. And once a causal relation and the relevant mechanisms have been identified, scalability is assumed, not explained.

In practice, scaling has proved to be much more difficult than these assumptions would suggest. An inquiry into scalability and the development of scaling strategies for scaling require a different kind of methodology. Moving from simple causal relations and their policy equivalent — intervention strategies that assume that pulling lever A will create outcome B — calls attention to processes of change that have to be understood as a set of iterative relations between different actors with different interests, evolving institutions and governance regimes, etc.

Several parallel discussions on scaling have been launched at Columbia University by the Committee on Global Thought and the Center on Global Legal Transformation with colleagues from around the university in law, political sciences, history, business, sociology, as well as the Harriman Institute. Additional discussion fora may be added over time. Insights from these parallel discussions in different domains will be pooled and shared with the goal of constructing the requisite methodological tools for assessing scaling processes.

Past Research Discussions

Rescaling Attributes of the Nation State

Initiated by Reinhold Martin (CGT) and Katharina Pistor (CGT & CGLT)

Globalization is often associated with the rescaling – mostly downsizing – of ‘the state’. In some instances, states are rescaled, as when units within states declare independence or independent states are occupied by foreign states or international entities. More common is the rescaling of attributes that associated with statehood, such as sovereignty, citizenship, security, rights. Rescaling along these dimensions takes place at multiple levels and frequently in often opposite directions: Sovereignty may be scaled down externally for trade and investment, but scaled up for migrants or finance; domestically, control over matters of religion may be waning even as security surveillance is increasing. The state is both object and agent of scaling; by conferring rights and entitlements on firms or associations states create the institutional foundations for these entities to scale, often but not necessarily at their own expense.

Rescaling the Firm

Initiated by Ran Kivetz (Columbia Business School) and Katharina Pistor (CGT, and CGLT)

Mom-and-pop shops, high tech startups, publicly traded entities or diversified business conglomerates are creatures of different scale and scalability. Most new firms fail; some follow the textbook path from a small, entrepreneur owned to a publicly traded firm; others are bought out at before they come of size, and yet others are spun off from large conglomerates. It is not well understood what makes any of these transitions possible and why some succeed but others fail. The rescaling of firms involves multiple and interdependent transformative processes of organizational change, including sources of finance, manufacturing processes, labor management, customer services, final products. For many firms scaling up is perceived as the biggest challenge; yet, for some purposes (R&D) smaller scales may be ‘beautiful’. Finally, in the area of finance, governing entities of excessive scale or finding ways to scale them down to a more manageable size without destabilizing the financial system poses difficult problems for policy makers.

Learning from Transition: From the Local to the Global

Harriman Institute Core Project 2014-2015, directed by Katharina Pistor and David Stark

The last 25 years of transition in Eurasia witnessed institutional transformation on a historical scale. New institutions aimed to cement the rule of law, pluralistic democracies and market economies in the region, but hindsight suggests that transition was more complicated. The 2014-2015 core project, Learning from Transition, unpacks assumptions about the path of political, social and economic reforms in the region by critically examining the conditions for scalability and portability of institutions. Can insights from the transition experience be brought to bear on policy and institutional design in other settings? When do local solutions work best? When should we favor international solutions? Why are efforts to reform hard to sustain over space and time? How can local level successes be scaled up? How can diverse stakeholders promote collective goals? We aim to develop insights about these issues especially with reference to expectations, strategies, and preliminary outcomes in other parts of the world that have embarked on similarly ambitious reforms, including East Asia, the Middle East, and Africa.