What is the role of large companies in an entrepreneurial society

Throughout the lives of most of us large companies have dominated the economy.  They have employed the most people, produced the most goods and services and have had the greatest influence.  In recent years, though they are still dominant, there are signs of ineffectiveness in the these organizations.  They are not flexible in their approach and are often taken down by emerging technologies.  Their political influence often seems more detrimenental to society than beneficials.  Most people I know don’t trust them and few want to work for them.  So what is their role in a world that needs more innovation and entrepreneurship?

Is it possible for an economy to flourish when made up of a smaller number of large companies and a multitude of small ones?  Will these small companies work in a sort of eco system where a large company sits at the center surrounded by a network of small entities?  Alternatively will the small companies serve as acquisition targets for large companies that can’t invent things on their own?

If we are heading into a world of slower growth large companies may not have the environment they need to keep growing.  Depending on what you believe about the supply of fossil fuels we may also be looking at a more localized world.  This could be a world that is dominated by small companies without the need for large entities.

Do all small companies aspire to grow into large ones?  If a company stops growing or trying to grow will it stagnate or decline or is a steady state possible?  With the technology that exists today we could see an evolving network of small companies that accomplish what larger ones used to do.  However this network should be more responsive to change and hopefully more sensitive to people and society.

I ask these things because we tend to get caught up in thinking that the world will be much in the same in the future as it has been in the past.  I hear that more younger people want to start their own businesses rather than work for large ones.  I also meet alot of boomers that are ready to step away from the big company world and strike out on their own.  If these trends do transpire and people no longer see large companies as desirable places to work then they will need to respond to that or see their role diminished.

Published by Vince Bulbrook

Vince has spent over twenty five years working with entrepreneurs providing financial and strategic advice. Much of this advice has centered on business model design and product development. Issues such as determining how to invest product development resources, pricing options, features, distribution and client requests all come in to play. For much of the past fifteen years Vince has operated a business providing CFO and strategy services to small businesses. In this period he spent three years in the product development group of a software company that had a $26-million development budget. Along with overseeing the development of a product he also worked with senior management and the other product teams to determine how to manage the product portfolio. He has advised clients in software, entertainment, digital media, publishing, retail and distribution on product pricing, feature selection, distribution strategy. Prior to founding the advisory business Vince worked with Price Waterhouse and Ernst and Young. Vince graduated from the Ivey School of Business with an HBA and is a Chartered Accountant.

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