You’re best off building an expensive infrastructure for technological research, even if that means your resource stockpiles are low or diminishing, and even if that means you occasionally have to scramble to cover a deficit in one of the basic resources. Trading between different resources is often expensive and inefficient, so best to make a surplus of all of them!īut this is a trap: Stockpiled resources don’t do you any good while they’re sitting there, and the futuristic technologies you can research have powerful exponential effects. At a first pass, you might think it’s beneficial to have steadily growing stockpiles of these goods. In order to do this, your population gathers or produces resources like food, minerals, alloys, and energy. These games have working capital all over the place.įor example, consider Stellaris, a computer game that puts you in charge of a spacefaring empire that expands to other worlds. In many strategy games, you build something-an empire, a company, a city, a factory-that grows over time, using the returns from previous projects to fund even larger new projects. It turns out that games are really good at exhibiting this principle. But over large companies like Toyota or Walmart, there can be tens of billions of dollars in “working capital.” Reducing that number can be extremely valuable. You could have worked on a project that would bear immediate fruit, and then return to creating the good when it’s actually needed. Or if you prefer to think in less financial terms, consider that you spent time and effort a whole year before you needed to. You could have just invested the $96 in bonds instead. But if you create a good for $96 and sell it for $100 a year later, and interest rates are 4 percent, you actually didn’t gain anything at all from your business. Of course, it’s good to have some goods on the shelves. The concept sounds pretty technical, but is actually straightforward: if you have inventory on the shelves or in warehouses somewhere, there’s a hidden cost from the fact that resources or cash are “locked up” and unavailable for other uses. One thing a lot of games do well is simulating the implicit costs of high working capital. Games can teach you the perils of too-high working capital
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