Biological technologies constitute a rapidly growing portion of the U.S. GDP, about 1%, or $150 billion, as of early 2008. If biological processes continue to displace chemical processes in industry, we might expect all of industry to look more like biology. While most industrial chemistry is carried out in large facilities, throughout the living world big organisms are rare. Yes, we have a few examples of gigantic trees and charismatic megafauna, but very few creatures are larger than about a meter. The vast majority of biomass on Earth consists of microbes.
Physics and economics both dictate that some kinds of industrial processes are best implemented at scale. Anything involving large amounts of heat, particularly when there are large masses of water involved, generally benefits from increased scale because energy can be more easily contained and recycled. Energy is more easily contained with small surface to volume ratios; big vessels and pipes loose less heat. Similarly, benefits of scale can be found in big pipes have less fluid resistance and are easier to pump things through.
Biology tends to do things smaller. Thus when I muse about the possibility of distributed biological manufacturing, particularly the potential of distributed biofuel production, I am inspired by the fact that biological processing tends to be networked or mobile. Ecosystems are full of material transport and exchange, a large part of which is mediated by animals that wander around eating in one place and crapping in another.
As transportation costs increase with the price of oil, moving both food and manufactured goods around will be ever more expensive. At some point, we should expect food to be cheaper when grown locally and transported shorter distances.
According to an Op-Ed in The New York Times a couple of weeks ago, we are well past the point where small farms are more economical than large ones. In "Change We Can Stomach", Dan Barber writes that:
...Small farms are the most productive on earth. A four-acre farm in theUnited States nets, on average, $1,400 per acre; a 1,364-acre farm nets $39 an acre. Big farms have long compensated for the disequilibrium with sheer quantity. But their economies of scale come from mass distribution, and with diesel fuel costing more than $4 per gallon in many locations, it’s no longer efficient to transport food 1,500 miles from where it’s grown.
Mr. Brown doesn't cite any sources for these numbers, but it is something I will be looking into as my book finally gets wrapped up. It is generally asserted by economists that 1) large farms are a better use of land, and require less labor per unit output, than small farms, and 2) labor has a higher value in cities when employed in manufacturing.
But cows are cheap and mobile, and if biological technology ever gets to the point of using cows to produce industrial products, then the economies of scale could be radically shifted. I am put in mind of a short story by David Brin in which not only cows are used as biomanufacturing platforms, but people are, too. Here's to hoping that is some years off.