Small companies do most of the innovating. When an idea is ripe, it gets picked by the bigger companies at a premium. So there is a lot of incentive for people to innovate. They get rich creating things.
Consolidation of companies is what I call creative destruction. It rids the economy of waste. It can go too far and turn into a monopoly, but we mostly have protections against that. By combining companies, we get rid of excess expenses and that improves productivity and allows the freed up resources to do yet more which grows our economy. So it actually creates jobs and value in the long run, but it is sure destructive in the short run. 2011/8/9 Cédric Beust ♔ <ced...@beust.com> > On 9 August 2011 20:06, Josh Berry <tae...@gmail.com> wrote: >> >>> 2011/8/9 Cédric Beust ♔ <ced...@beust.com>: >>> > the existence of patent portfolios is a >>> > strong driver in big companies acquiring little ones, which I see as >>> good >>> > for the industry and innovation in general). >>> >>> Do you have anything to back this? It always seemed to me that >>> trademarks/marketshare and talent were the largest drivers of >>> acquisitions. At least the successful ones. >>> >>> >> More to the point, what proof is there that acquisition in general is good >> for the industry and innovation? >> >> I would have thought that having more, and smaller, companies is going to >> do better in terms of job creation, range of products on the market, quality >> of customer service, distribution of capital back into the economy, etc... >> > > It seems like a bit of a catch 22. The existence of small companies looks > important to me, but if the odds of being acquired are very low, very few > entrepreneurs/investors will take the risk to create one. It looks like we > need to maintain a fragile balance of always having a reasonable number of > small companies with a reasonable percentage of them being acquired, but not > too much nor too little. > > Sounds like the very definition of unstable equilibrium. > > -- > Cédric > > -- > You received this message because you are subscribed to the Google Groups > "The Java Posse" group. > To post to this group, send email to javaposse@googlegroups.com. > To unsubscribe from this group, send email to > javaposse+unsubscr...@googlegroups.com. > For more options, visit this group at > http://groups.google.com/group/javaposse?hl=en. > -- Robert Casto www.robertcasto.com www.sellerstoolbox.com -- You received this message because you are subscribed to the Google Groups "The Java Posse" group. To post to this group, send email to javaposse@googlegroups.com. To unsubscribe from this group, send email to javaposse+unsubscr...@googlegroups.com. For more options, visit this group at http://groups.google.com/group/javaposse?hl=en.
