To comprehend the economic issue of scale is hardly a brain teaser. It is obvious, for example, that weekly consumption in Anchorage of many thousands of gallon-containers of milk shipped from the state of Washington can be sold at a similar profit margin compared to several hundred in Barrow only if Barrow pays a significantly greater price per gallon. At play here are the higher per-unit shipping costs added to higher distribution costs resulting from higher per-unit labor and facilities costs, to mention only a few costs. Most economic activity is substantially influenced by the pervasive detriment of small scale caused by the value of critical mass. (There are exceptions, as can be illustrated by the economics of convenience stores, given their counter-intuitive dynamics.)

How to deal with this economic challenge? Strategies have been developed that consolidate smaller units into larger ones, strategies subsumed under the rubric of fostering collaboration. One can form consortiums and co-operatives to generate joint purchasing, joint distribution and joint outsourcing. In addition one can identify and share experience and knowledge to overcome, or at least mitigate, the challenge of small scale. Constructive economic analysis can establish benchmarks of optimal and viable scale.

EDUCATION

It is no denigration of the value of education to claim that it is only an act of faith that assigns a significant responsibility for economic expansion to educators, especially under conditions of weak or faltering economic conditions. For years after the Europeans abandoned their African colonies, the newly formed nations supported universities that prepared graduates in fields immediately irrelevant to their economies, for example, in expensive doctoral curricula in physics.

One can divide education into two types, general/liberal education and vocational training. The former has extensive and pervasive value, but only after long-term and extensive investment. The latter, vocational training, has immediate value only if specifically designated jobs are immediately available in the local area. Otherwise, many such educated and/or trained individuals will emigrate from the immediate area, thereby offering little or no benefit for the educational investment, except to the
departed individual.

At best, the relationship between educational and economic expansion has much in common with the order in which one places the chicken and the egg.

Vocational training is both people intensive (faculty and staff) and equipment intensive, making it a costly investment. To offer such a program in a very small community not only limits the range of disciplines in the curriculum but produces seemingly prohibitive costs. It would appear to be much more cost effective to consolidate into larger units, even with the added expense of dormitories. The issue of scale will be dominant in offering education and training in small communities.