Giant Firms in the Information Economy

The primary objective of this paper is to present a discussion of the potential significance of giant companies in the emerging new information economy. In the 1970s and discussion of the significance of giant firms would be somewhat uncontroversial. Within economics, the work of, for example, Prais (1976) established empirically the central position of giant firms in market economies. From a more interdisciplinary perspective, theorists (particularly Marxist inspired writers) emphasised the development of a monopoly based capitalism (for example, Baran and Sweezy, 1968; Cowling, 1982). But more recently these established or stylised facts have been questioned. As discussed below, an explicitly small firms literature has developed. This literature is frequently linked to claims that the changing dynamics of modern market economies have undermined the position and significance of giant firms. Other writers, for instance the sociologist Castells (1996) links the very same dynamics to a continued role for giant firms in a globalised world.