As large companies expand or snap up the competition, it sometimes seems that globalization and the ubiquity of communication will lead to business being dominated by the mega-monoliths of commerce. But is this inevitable? Is it even tied to reality?
Not according to John Micklethwait, U.S. editor of The Economist. In a Webcast on economist.com and in an interview with Iain Ferguson on opendemocracy.net, he sees a future with smaller and midsize businesses not only holding their own but expanding their share significantly. A historian of business – his latest work, co-authored with Adrian Wooldridge, is “The Company: A Short History of a Revolutionary Idea” – Micklethwait sees the current climate as highly favorable for smaller companies. “My bet, generally, is that (the global business environment) will move gradually towards a more networked future, and we will gradually move towards yet more small companies”, he says.
A Big World for the Little Guy
In other words, Globalization actually helps small companies, because of the ease of working across national borders to form networks. As he notes, “The idea that companies are getting too big is a gross abuse of statistics. Far from gaining economic clout, the biggest multinationals have been losing it. Over the past 20 years, the world’s biggest 50 firms have grown more slowly than the world economy as a whole.”
No modern company, he explains, is remotely as powerful as the British East India Company, which controlled a subcontinent with its own army. Nor can the likes of AOL Time Warner compare to United States Steel at the end of the nineteenth century, when it controlled 85 per cent of the American steel market.
According to Micklethwait globalization supports SMBs, because open borders help them export their products around the world as rapidly as the multinationals.
In addition to his work on The Economist, John Micklethwait has appeared on leading radio and television interview programs and written op-ed articles for the New York Times, The Wall Street Journal, and several other publications.