The issue isn’t that contractors are less productive, nor are they less capital efficient. The issue is they are less easily controlled. You can’t just issue a directive via email and expect them to obey it because that will put their legal status as contractors in jeopardy. You can’t just demand they use your equipment or follow corporate policy.
If you are happy just having the job done, and don’t need the ability to control details of execution then contractors are often more efficient. (Depends on the task and the market)
The danger is, you may find your contractors start selling to your competitors. Then you need to compete on your core product.
Most corporate strategies don’t boil down to “have a competitive core product” they boil down to “control as many aspects of your market as you can so the cost of entry is too high for others to follow”.
If you are happy just having the job done, and don’t need the ability to control details of execution then contractors are often more efficient. (Depends on the task and the market)
The danger is, you may find your contractors start selling to your competitors. Then you need to compete on your core product.
Most corporate strategies don’t boil down to “have a competitive core product” they boil down to “control as many aspects of your market as you can so the cost of entry is too high for others to follow”.