Big Firms And Small Firms

1359 Words Dec 12th, 2014 6 Pages
Progressively, to an increasing extent, professionals in the financial world are beginning to recruit smaller firms as opposed to the conventional recruitment of large firm with monetary benefits, tax deductions and other motivations (Gort et al, 1982). This approach has two features: Firstly, developing and supporting entrepreneurs and small businesses, secondly, expanding/ improving infrastructure and to recruit a highly experienced and educated workforce (Gruber, 1995). These efforts depend on improving the quality of life in the community and generating an attractive business climate. Studies from economic development strategies aimed at attracting large firms are likely to be successful only at high cost (Grabowski, 1968).
The idea is not primarily for new businesses to create jobs on a small scale but to enhance maximum growth in such businesses through creation of ideas that may enable them grow into larger firms thus, creating more jobs on a larger scale and leading in the industrial world (Grabowski, 1968). This essay is going to compare big firms and small firms in terms of their innovation; the comparison will be based on their economies of scale, scope and spillovers, research and development.
Whether or not large firms are more innovative than the small firms is debatable. A firm’s innovative efficiency is affected by its size, large or small. Large firms are sometimes more efficient because they possess economies of scale. Economies of scale is an increase…
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