It's the churn that matters

Reader comment on: Steel, Fashion, and Entrepreneurship

Submitted by Fred Van Bennekom (United States), Mar 27, 2012 19:13

I think the point the authors was making is that with many small firms, capitalism's creative destruction will likely result in some of those succeeding wildly while some fail. It creates a more stable situation versus when a large firm succuumbs. It's not a matter of apparel vs steel industry, but one large vs. many small.

I worked for Digital Equipment Corp., which had 60,000 employees in the Boston area in the late '80s, 120,000 worldwide. We had a few other large computer companies here -- Wang, Prime, Data General. When these large firms failed because they missed the change in computing, it took decades for the area to recover. (Several of DEC's buildings are still vacant 15 years later, including corp. HQ.) We have a more diverse economy here now.

Sadly, I would agree that large companies can bread bureaucrats. I say -- to the angst of some of my former coworkers -- that DEC taught us to think bureaucratically, not entreprenuerially. We built a state-of-the-art decision support system in the mid '80s for internal use. The company wasn't interested in turning it into a saleable product. I wish one of us on the team thought about creating our own company. I'd be retired -- and focusing full time on promoting the philosophy of free markets.

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