The experience curve
The more experience a firm has in producing a particular product, the lower its costs
The experience curve is an idea developed by the Boston Consulting Group (BCG) in the mid-1960s. Working with a leading manufacturer of semiconductors, the consultants noticed that the company's unit cost of manufacturing fell by about 25% for each doubling of the volume that it produced. This relationship they called the experience curve: the more experience a firm has in producing a particular product, the lower are its costs. Bruce Henderson, the founder of BCG, put it as follows:
Mini crossword
Our wordplay puzzle
Job advertisement: Freelance Sound Designer, Podcasts Department
Work for The Economist’s Podcasts Department
We’re hiring a podcast-video producer/editor
Join The Economist’s video department
Archive 1945
How The Economist reported on the final year of the second world war, week by week
How Ozempic could change beauty standards
A handpicked article read aloud from the latest issue of The Economist
13:09
Paid interns on The Economist’s foreign desk
An opportunity to write for The Economist
