Successful companies tend to grow. Could Google make just about as much money with 5000 people as they currently make with 20,000? Perhaps, but while adding people has a positive ROI they are going to keep doing that. There high value for large organisations to buy small ones and IP law tends to create cash cows which buy up all the interesting companies around them.
PS: When companies that can kill Google, IBM, and Toyota while staying small show up I might agree with you until then I expect things to stay like they are.
"This doesn't mean big companies will disappear. To say that startups will succeed implies that big companies will exist, because startups that succeed either become big companies or are acquired by them. But large organizations will probably never again play the leading role they did up till the last quarter of the twentieth century."
That is actually the point I thought needed more exploration. For one thing it seems to accept that 'startups' are a product of an environment dominated by large companies. There are some interesting questions that arise:
* A theme running through many of pg's essay is that startups are a far more productive use of resources. Pg sometimes uses acquisitions as an example taking the same resources & applying them to a large organisation. The result is reduced productivity. Doesn't that imply that acquisitions shouldn't take place in the first place? A transaction is supposed to take place when it produces some sort of a net surplus.
* Can a startup complex survive without acquisitions?
* If size is a disadvantage, isn't this a disincentive to grow? Wouldn't that put a company in danger of being out competed by smaller players?
* If growth is capped by anti - economy of scale effects, is there still enough incentive for startups?
* Today's startups often float around winner take most areas. Isn't this at odds with small organisations being dominant? The solution to this one seems alarming: Small organisations with huge revenues. If this scales we get a large number of Googles being run entirely by a few hundred employees & responsible for a level of wealth creation grossly disproportionate to their number of employees.
My ideas are pretty uncooked. But what I'm saying is that this prediction might be more robust if it explored a separation startup & big business. IE what does a startup look like in an economy dominated by startups. Foxes can never outnumber rabbits.
Successful large companies may become environment providers, like universities. That's their self-assigned role as long as starting up is expensive and hard (bureaucracy, health care, etc.)
IBM, Microsoft, Google--they have one or a few core selling products, the rest of their activities could be explained as self-promotion to those that would otherwise invest their time and skills elsewhere. In short, survival.
Stretching it, such large companies may become countries in the sense that they cover the needs of their citizens. Like a VM on an OS. The lucky ones will have wise benevolent dictators (the best political option in Plato's government evolution stages--not that I am endorsing it.)
"Free Agent Nation" describes this (or at least very similar) process/pattern as well. A world of free agents is at the highest resolution possible in that sense.
I would agree with this completely but extend it to monolithic intuitions such as governments, legal systems, policing, armies, councils, schools, etc. I envision that the networking changes we are witnessing are much more profound than just for business, which will apply themselves just the same to the very structures that currently control nations.
