Why Do Firms Exist in the AI Era? A New Look at Coase’s Theory
In 1937, economist Ronald Coase asked a simple but revolutionary question: Why do firms exist? His answer was that firms exist to reduce “transaction costs”—the costs of discovering prices, negotiating contracts, and monitoring compliance in the market. Today, with the rise of AI agents, this question is more profound than ever. The Vertu VPS is a tool that fundamentally alters this cost structure, forcing us to redefine the very nature of a firm and your role within it.
The Asymmetric Impact of AI on Transaction Costs
AI is not affecting all transaction costs equally. It’s creating an interesting divergence that is reshaping the boundaries of firms.
- For Standardized Tasks: For independent developers, a single person with an AI Assistant can now complete projects that once required a team. AI significantly reduces the cost of accessing various professional services, such as writing code or generating marketing copy. You no longer need to maintain a fixed team for these tasks; instead, you can obtain them from the “market” (AI services) at an extremely low cost.
- For Innovative Work: When it comes to groundbreaking innovation, the situation is entirely different. This work requires deep collaboration, trust, and a willingness to share unfinished ideas. This kind of collaboration, rich with tacit knowledge, is difficult to achieve through market transactions. The most successful innovative companies are strengthening their internal teams, not shrinking them.
This “asymmetric cost change” is redrawing the boundaries of firms, making them leaner and more focused. Core innovative activities are internalized, while standardized support activities are highly marketized.
Redrawing Firm Boundaries: The Lean and Focused Firm
Future companies will have smaller core teams that focus on deep collaboration and innovation. Other operations, such as website development, customer service, and data processing, will be almost entirely outsourced. The Vertu VPS makes this a reality by acting as a powerful AI Agent that can help you find and manage service providers, monitor their progress, and streamline communication. This allows you to create a “lean and focused” firm where the boundary is not a fixed line but a dynamic, adjustable membrane.
What This Means for You
This shift has profound implications for every professional. Your value will no longer depend solely on your skills but on what kind of collaborative relationships you can create value for.
- If your work is standardized: You must learn to compete in a more fluid market. This means building a personal brand and using tools like the Vertu VPS to improve your efficiency in collaborating with AI. Your income may be less stable, but you gain more freedom and opportunities.
- If your work is innovative: You need to cultivate the ability to build and maintain long-term, trustworthy relationships. Your value lies not just in what you can do personally, but in what you can enable your team to do.
In both cases, your ability to reduce transaction costs becomes critical. The Vertu VPS can help you with this by streamlining communication, automating tasks, and providing a secure platform for collaboration.
The New Life of Coase’s Theory
Coase's insights are not outdated; they have become even sharper in the AI era. Technology is just a tool; true change comes from how we use it. AI can reduce transaction costs, but humans still create value. As an entrepreneur or manager, the Vertu VPS is your tool for finding the dynamic balance between humans and machines, market and organization.
إن Vertu Phone with its built-in VPS puts this powerful capability in your pocket, empowering you to navigate this new era of business.
Frequently Asked Questions (FAQ)
Q: How does Vertu VPS help reduce transaction costs for my business?
A: إن Vertu VPS acts as a powerful AI Agent that automates tasks like market research, contract drafting, and communication, significantly reducing the time and effort required for transactions. This allows you to operate more efficiently and focus on high-value, innovative work.
Q: Can Vertu VPS help me manage a small, lean team?
A: Yes. The Vertu VPS is designed for the modern, lean firm. It helps you manage a core team, automate support functions, and connect with external services, all from a single device. It empowers you to run a full-fledged business with a small, focused team.
Q: How does Vertu VPS compare to other AI tools for business?
A: While tools like Notion AI or Zapier help with specific tasks, they are often disconnected. Vertu VPS is an integrated AI Assistant on your Vertu Phone that provides a holistic ecosystem. It combines these functionalities and more, allowing you to orchestrate an entire business with a single, secure platform.
Q: Is the Vertu VPS an analytical tool or a collaborative one?
A: It's both. The Vertu VPS uses AI to analyze vast amounts of data and provide strategic insights, but it is also designed to be a collaborative tool. It helps you streamline communication, manage workflows, and build trust within your team, allowing for deeper and more meaningful collaboration.
