Wright's Law (Learning Curve)

Theodore Wright's empirical observation that the cost of producing something decreases by a consistent percentage every time cumulative production doubles—typically 10-25% cost reduction per doubling. Originally observed in airplane manufacturing, the pattern has proven robust across industries: solar panels, batteries, semiconductors, and many manufactured goods. Wright's Law is experience-driven: costs decline because organizations learn by doing—finding efficiencies, improving processes, and developing expertise through cumulative production. Unlike Moore's Law (time-based), Wright's Law is production-based: more output → lower cost per unit.

When to use it

When projecting future production costs for scaling businesses; when deciding whether to invest in volume to drive costs down the learning curve; when evaluating whether a currently expensive technology will become cost-competitive; when competing in industries where cumulative experience determines cost position.

How it can help

For any product or process where you're investing in scale, project cost declines using Wright's Law: estimate your learning rate (cost reduction per doubling of cumulative production), then forecast costs at future production volumes. This transforms 'when will this be cost-competitive?' from speculation into calculation. Strategic implication: invest aggressively in production volume early, even at a loss, because each unit produced makes future units cheaper. The leader in cumulative production has the lowest costs—creating a compounding advantage that late entrants can't match without massive investment.