Both the original blog post by Karls Smith, as well as The Economist's Free Exchange comment have much to commend. They are very insightful, and these insights have quite serious and broad implications, beyond that which is explicitly stated.
For one thing it supports Steve Yegge's long rant about Google and the importance of platformization - Don't think you can do everything yourself, but rather let other developer's try to add value to your product by opening up to them.
Also, it speeks volumes about the public sector, with the clear implication that outsourcing service production to multiple service providers will be much better than relying on a single monolotihic organization to come up with all the ideas. Further, it does cause a bit of concern when thinking about the planned changes in the municipal structure here in Finland. While I do see the potential for improvement, fewer municipalities will without a doubt lead to fewer organizations producing services, given the hesitation to outsource.
Brian Christian has an interesting column relating to this on Wired.com. He highlights how the US Supreme Court already in the 1930s noticed the "happy incidence of the federal system," allowing states to carry out comparatively small scale experiments. Merging a lot of the Finnish municipalities, without outsourcing production of services to a large degree would deny Finns the benefit of this kind of experimentation.
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