Glenn Reynolds writes about the robustness of a small-business economy.Â Â I think he’s exactly right – a hundred small businesses employing 100 people each are much more resilient than 1 large business employing 10,000 people.
- The small businesses can (should) have better relationships with their customers
- The small businesses can diversify in a number of different ways
- The small businesses can experiment with different techniques
- The small businesses spot trends earlier
Admittedly larger busineses have some advantages too:
- They are usually more efficient
- They can leverage their size to make bigger bets
Having said that, the big bets often fail, and the efficiency almost always (if not always) comes at a cost to flexibility.Â Â And they are far too often blindsided by changes in the world around them.Â Efficiency, in my opinion, is generally overrated as a key principle of business, because the long term costs are so very, very high.