This is the Golden Age of big business. Depending on your perspective, it spells out the Dark Age for small business.
Wealth is being concentrated — it has risen from main street to Wall Street. After Nvidia, Microsoft has emerged the second company to reach a market capitalization of $ 4 trillion. Nine out of 10 biggest corporations in the world are US-based. All of them are worth at least $ 1 trillion.
In fact, legislation enacted favors big business. These generate a large share of employment. Over the last 30 years, the businesses are becoming bigger. It is difficult for smaller companies to go public. Smaller companies going public offer stake at a discount. Pre-pandemic, the US has 7000 listed companies (1996). Those have shrunk to 4000.
Mom-and-pop stores though still around, are not favoured by consumers. Even rented houses are being owned by a private equity firm or a local landlord. Big business is more efficient in absorbing costs. Smaller businesses pass on costs to consumers.
Smaller businesses create jobs and are innovation hubs. Still big business scores over smaller units. These scale quite easily and are more efficient in logistics. They are bought by big business.
Big companies are not favourable for innovation. If Big Tech companies collapse, it will be disastrous for the market. It will affect savings and retirement plans. It will raise cost of capital for all. At the same time, small businesses do not remain profitable — they have to pay liberal wages and provide benefits. Policies favor big business. Tariffs are better absorbed by the larger firms.
AI as has the potential to democratize services and tasks that were mostly handled by large staff. Anti-trust policies favour breakup of the big business. However, that is not so helpful to smaller businesses, which bear higher costs on account of policies.
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