Why large firms are often more inventive than small ones - Schumpeter: The Economist

SOME people say it is neither big nor clever to drink. Viz, a British comic, settled that debate with a letter from a reader who said: “I drink 15 pints a day, I’m 6 foot 3 inches tall and a professor of theoretical physics.” However, another question about size and cleverness has yet to be resolved. Are big companies the best catalysts of innovation, or are small ones better? Joseph Schumpeter, after whom this column is named, argued both sides of the case. In 1909 he said that small companies were more inventive. In 1942 he reversed himself. Big firms have more incentive to invest in new products, he decided, because they can sell them to more people and reap greater rewards more quickly. In a competitive market, inventions are quickly imitated, so a small inventor’s investment often fails to pay off. These days the second Schumpeter is out of fashion: people assume that little start-ups are creative and big firms are slow and bureaucratic. But that is a gross oversimplification, says Michael Mandel of the Progressive Policy Institute, a think-tank. In a new report on “scale and innovation”, he concludes that today’s economy favours big companies over small ones.

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The Crisis of Credit Visualized

I like this because it makes a complex topic simply and shows the value of vizualising complexity.

How Much Do We Need To Know or Should We Know - The Conference Board Review - James Krohe Jnr.

In twenty years of the Internet age, big companies have come to know more about their customers, their suppliers, and their own operations than they ever did, or could. Information pouring in from sensors and points of sale enables businesses to know how to sell things to shoppers before they know they want them, fix machines before they break, reorder stock before it runs out. “Big data,” which McKinsey trumpeted in March as “the next frontier for innovation, competition, and productivity,” is in fact the previous frontier with a new name.

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Why The Dumbest Idea In The World is Maximizing Shareholder Value - Forbes - Stephen Denning

“Imagine an NFL coach,” writes Roger Martin, Dean of the Rotman School of Management at the University of Toronto, in his important new book, Fixing the Game, “holding a press conference on Wednesday to announce that he predicts a win by 9 points on Sunday, and that bettors should recognize that the current spread of 6 points is too low. Or picture the team’s quarterback standing up in the postgame press conference and apologizing for having only won by 3 points when the final betting spread was 9 points in his team’s favor. While it’s laughable to imagine coaches or quarterbacks doing so, CEOs are expected to do both of these things.”

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Lessons Learned: STARTUP IS VISION - Eric Reis

The following is a rather unusual guest post. One of the more surreal parts of speaking publicly and putting ideas out into the ether is to watch other people run with them. I can't seem to help tuning into comment threads on blogs, news aggregators, etc. Internet people being what they are, a lot of these comments are nasty, brutish, and short. However, every once in a while, I come across someone who consistently corrects other people's mistakes. Someone who seems to get it. And who am I to complain if that someone happens to be a giant robot dinosaur named FAKEGRIMLOCK?

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