Earlier in the week was Small Business Saturday, which encourages people to shop at locally-owned small businesses. It’s the kind of event promoted by chamber of commerce types, and locavores, who think if we spend more of our money at local businesses, it’s good for the local economy. It it is, but also shopping locally promotes waste and inefficiency.
Big businesses are successful because they have economies of scale, they can sell, move, and produce product with less waste and overhead then small businesses. Less waste doesn’t just mean more profits, it also means less trash going to landfills, less electricity wasted, less costs on things that don’t actually make peoples lives better. Big business is typically better regulated by government, less likely to engage in fraud or crime then small businesses. I am not against Big Business, I think in many ways it’s good for our economy.
Small businesses do have an important role in our economy – they promote innovation and new ways of doing things. Large businesses are risk adverse. Why try something that’s risky when there is sure bet? All large corporations originally started small, usually with a novel product or service, something of value that isn’t provided by an existing business. Small businesses are also a leading employer when grouped together collectively.
Indeed, I’ve toyed with the idea of getting into small business myself. I think at some point I could turn my mapping skills into a businesses of my own. I’ve seen advertising for some of the mapping products that other people are selling on the Internet, and there seems to be a market for high quality maps, especially those printed on good water-resistant paper. There also is a big market for making maps with aerial (orthophotos) and other tree data for hunters and others who could benefit from a careful survey of their lands. But not for now.
Now we could do a lot to help small businesses by getting the health insurance and retirement burden off their backs, but government has been slow at creating a universal healthcare system. They could also create more options for supporting retirement efforts of both employees and owners of businesses. Regulations could be simplified and made more straightforward. Lots of things could be done to make life better business of all sorts.
I am not one who bemoans the lost of local business in favor of big business. Efficiency should win. Lower prices, more selection are good for consumers who often have a limited budget. But I also think small businesses do have an important role in our economy, advancing novel new products and services that aren’t provided in communities but are needed. Small business should be encouraged but big business shouldn’t be frowned upon – each should be emphasized for their unique strengths.
