Podcast Summary: Brian Potter on "The Origins of Efficiency"

New Books Network | Hosted by Gregory McNip | October 28, 2025
Guest: Brian Potter, Senior Infrastructure Fellow at the Institute for Progress and author of "The Origins of Efficiency" (Stripe Press, 2025)

Episode Overview

This episode features a wide-ranging conversation between host Gregory McNip and author Brian Potter on his new book, The Origins of Efficiency. The discussion explores why some industries become more efficient over time while others lag behind, examining the technical, historical, and systemic drivers of productivity improvement. Potter draws on his experience in construction and his research to uncover the mechanics and broader societal implications of efficiency—offering accessible explanations, vivid case studies, and insightful reflections for anyone fascinated by the progress of technology, manufacturing, and civilization itself.

Key Discussion Points & Insights

1. Why Write The Origins of Efficiency? (02:06–05:53)

• Personal Motivation:
  "For most of my career… [the construction industry] seemed quite inefficient to me as well." (02:49, Brian Potter)
  Potter’s time at Katerra, a construction startup, shaped his questions about why productivity advances succeed in some fields and stall in others.
• Audience:
  Written to satisfy Potter’s own curiosity, the book targets anyone interested in improvement—business, government, or the curious layperson.

2. Defining Efficiency (06:22–07:01)

• Resource Minimization:
  Potter frames efficiency as reducing the resources (labor, materials, energy, cost) required for a process:
  "How stuff gets cheaper over time, which is… a pretty good measure of… the amount of inputs and resources it requires…" (06:52, Brian Potter)
• Broader Progress:
  Efficiency unlocks wider access to goods and underpins the story of societal advancement.

3. Case Studies: Penicillin, Printing, and Progress (07:13–10:12)

• Penicillin as a Metaphor for Civilization:
  "The story of penicillin is the story of civilization… It started out very, very expensive and difficult to make… Eventually, we figured out how to mass produce it…" (07:13–09:01, Brian Potter)
• Scalability Through History:
  Example: “By 1600, roughly as many books were printed in Western Europe every five years as had been produced in the entire thousand year period between 450 and 1450.” (09:55, Gregory McNip quoting book)

4. The Five (Plus) Routes to Efficiency (10:12–17:09)

Potter outlines five core ways to improve efficiency in production processes:

• 1. Fundamental Method Innovation:
  E.g., The progression in nail manufacturing from hand-forged to mechanical to modern machines.
• 2. Cheaper Inputs:
  Locate production where resources (like labor or electricity) are inexpensive.
  Example: Iceland’s aluminum industry leverages cheap hydroelectric power.
• 3. Scaling:
  Making more units reduces average costs due to fixed costs spread over outputs.
• 4. Reducing Variation:
  Minimize errors and unpredictability, leading to fewer defective products and waste.
• 5. Smoothing Process Flow ("Buffers"):
  Align process steps—reduce inventory between steps, increase reliability, cut costs.
• 6. Cutting Steps ("Process Simplification"):
  Remove unnecessary motions or tasks (a major insight from lean manufacturing and the Toyota Production System).
• Continuous Flow Ideal:
  “Very efficient production processes… tend to kind of converge on this similar form of a continuous transformation of goods from inputs to outputs.” (18:10, Brian Potter)

5. Value-Added vs. Non-Value-Added Work (19:50–22:06)

• Pareto Principle in Operations:
  Only about 10% of typical process steps are truly value-adding; the rest are ancillary or waste.
  “Only the like putting the bracket in place and attaching the two screws are actually contributing to the final product… everything else… is not strictly necessary…” (21:17, Brian Potter)

6. The S-Curve of Technological Change (22:45–27:52)

• S-Curve Concept:
  Technological progress follows an S-curve: slow improvement, then rapid gains, then plateau as the limits of a technology are reached.
  • Invention > Rapid Improvement > Plateau (limits) > New paradigm needed
  • Light bulbs as an example: “You needed to… introduce a fundamentally new technology [like LEDs]… each… with a higher luminous efficiency…” (27:16, Brian Potter)

7. Design for Manufacturability & Value Engineering (28:03–33:44)

• Production Process Reflects Product Design:
  Efficient production depends on designing products that are easier and cheaper to manufacture.
• Value Engineering:
  “It’s basically just looking at whatever it is you’re producing… and whether you can sort of get similar value for less expenditure.” (33:23, Brian Potter)
  Even tiny savings (e.g., swapping a cover) become major at scale.

8. Mechanization’s Benefits (29:56–31:28)

• Human labor is costly and limited; machines can work faster, increasing output and lowering cost per unit.

9. Vertical Integration: Pros and Cons (34:43–35:53)

• Benefit: Lower costs, more reliable supply.
• Drawback: Can become cumbersome, less agile in changing markets.
• Automotive case study: Ford’s shifting approach to vertical integration over time.

10. Manufacturing Innovations – Toyota & Tesla (36:39–38:48)

• Both moved the industry towards greater efficiency.
  • Toyota: Lean manufacturing, minimal waste, flexible and efficient systems.
    • “Flexibly at lower volumes.” (37:30)
  • Tesla: Large aluminum castings to consolidate car frames, lowering cost and complexity.
    • “A real pioneer of these sorts of large castings.” (38:30)
• Their once-unique methods are now widely adopted.

11. Economies of Scale & Learning Curves (38:54–41:48)

• Scale is vital: “With enough scale and enough accumulated improvements, production costs can be driven down by orders of magnitude.” (interview summary)
• Learning curve: Each doubling of production leads to a constant % decrease in cost (solar PV as example).

12. Division of Labor (41:48–43:10)

• Not always a panacea; benefits depend on context.
• Toyota (again) sometimes finds less division brings more efficiency by cross-training workers.

13. Shipping Container’s Transformative Impact (43:12–43:56)

• Containerization: Dramatically reduced shipping costs, enabling global concentration of production and massive economies of scale.

14. Variation, Statistical Process Control (43:56–45:09)

• Variation: Deviations from desired output add cost and waste.
• Control: Statistical methods (originated at Bell Labs) help identify and remove sources of variation.

15. Bundled and Cascading Process Improvements (45:14–46:43)

• Positive cycles: Lower costs → higher demand → more output → even lower costs.
• Negative cycles: Rising costs → falling demand → even higher costs.

16. Assembly Line & Mass Production (47:02–48:42)

• Incremental to Breakthrough: The assembly line wasn’t a sudden leap, but an extension of earlier approaches to high-volume, continuous flow.

17. AI’s Potential for Efficiency in Resistant Sectors (48:53–50:46)

• Limited in already-optimized domains (e.g. mass manufacturing): “A humanoid robot would be so much worse at doing this task… than this specific dedicated equipment…” (49:43, Brian Potter)
• Biggest potential: Sectors with personalized, variable tasks (healthcare, education, car repair) where current approaches resist standardization and automation.
  • “If you have an AI that can respond flexibly based on environmental contexts quickly and cheaply, that will—maybe—have... improvements in areas that have historically been resistant.” (50:31, Brian Potter)

Notable Quotes & Memorable Moments

• On the Penicillin story as a metaphor for civilization (07:13):
  “The story of penicillin is the story of civilization… that basic process where we’re trying to sort of take these things that are very, very expensive to produce and figure out how we can make them more cheaply and easier so they’re more widely available—that is basically the story of how civilization has progressed over the course of human history.”
  — Brian Potter (08:04)

• On value-added vs. non-value-added steps (21:17):
  "Only the like putting the bracket in place and attaching the two screws are actually contributing to the final product. Everything else... is not strictly necessary."
  — Brian Potter

• On the S-curve of technology (23:49):
  “Eventually you get to a point where things start to click... performance starts to improve more and more rapidly... And then you start to run out of improvements... you weren't really seeing dramatic improvements in performance anymore, just because you had reached the ceiling of what this technology was capable of.” — Brian Potter (24:17–27:07)

• On AI and resistant sectors (49:50):
  “Where I think you’re going to see the benefits from these types of improvements in AI and robotics… is in these areas that have not seen really huge improvements… things like car repair, medical care, and education… where it’s expensive in part because it’s tailored to a specific set of circumstances…”
  — Brian Potter

Key Timestamps

• [02:06] — Why Brian wrote the book
• [06:22] — Defining efficiency
• [07:13] — Penicillin as a case study for civilization’s advance
• [10:12] — The five main drivers of efficiency
• [19:50] — Value-added vs. non-value-added process analysis
• [22:45] — The S-curve and technological progress
• [29:56] — Mechanization’s impact
• [34:43] — Vertical integration: pros and cons
• [36:39] — Toyota and Tesla as efficiency innovators
• [38:54] — The power of scale and learning curves
• [43:12] — Shipping container’s influence on global manufacturing
• [45:14] — Cascading and bundled process improvements
• [47:02] — Origins of the assembly line
• [48:53] — AI’s potential in hard-to-standardize sectors

Conclusion

Brian Potter’s The Origins of Efficiency reframes “efficiency” as a pillar of human progress, showing that transformative advances in how we produce goods have made civilization richer and better-off. Through real-world examples, clear-sighted historical analysis, and practical frameworks, Potter helps listeners (and readers) understand not only how industries evolve, but also why persistent inefficiencies emerge, and how breakthroughs can ripple through society. His insights emphasize that while some lessons of efficiency are nearly universal, every industry and era brings its own puzzle—and future advances (perhaps thanks to AI) may come not where processes are already optimized, but where complexity and customization have long resisted improvement.