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Big business has a vested interest in blocking innovation, new entrants and small businesses.

I can't agree with that assessment, and here is why. Big business spawns small business development, because, at least in my industry (Oil and Gas) it is smaller businesses which form the logistical support of Big Business.

In the course of drilling a well, the Operator hires the drilling rig, earthworks contractors, surveyors, roustabouts, rig moving specialists, drilling fluids companies, consultants, directional survey companies, and buys products ranging from shipping, salt and fresh water, material for surfacing the drill site, a host of rental equipment, casing crews, etc, ad infinitum. Some of these businesses on the vendor list are large, multinational conglomerates, some are as small as one-man LLCs. They are all jockeying for a competitive edge in their niche, and it is those edges, primarily ones which save the operator money, which are the source of innovation in the industry, as well as reducing their costs while maintaining quality or improving the quality of their services in a cost neutral fashion.

Sure, no one is going into a direct face-off with Exxon/Mobil or BP, but there is a question of capital outlay involved as well.

It is not uncommon for the really big companies to buy up innovative smaller companies as well, and often the small oil companies (you seldom hear about "Small Oil") are the ones which take risks which lead to discovering big plays. While they aren't out drilling deepwater GOM wells or the North Sea, especially of late, the power of drilling something different becomes manifest when one considers the Elm Coulee Field (the first major Bakken Field, in MT) was estensively (about half of the wells) drilled by one company few had heard of, and the others at the onset were not "big" oil companies, either.

The Big Boys only got interested when the reserve estimates were revised, and bought out some of the smaller companies at a handsome profit for their developers.

From the risks taken by a few smaller companies came one of the biggest booms in the Oil Patch.

Big business has a vested interest in blocking innovation, new entrants and small businesses.

The dividing line invariably is whether or not the small business is competitive to the big business.

Big business loves small business as customers. Take the large telcos. They love new small businesses as customers. But Verizon Wireless, for example, after the split up, simply went and merged across the country again to get their "national footprint" (GTE, etc.). I was working there as a consultant, employees matter-of-factly said this. Trouble is, the lack of competition has us overpaying for phone service by very large amount. Whatever the market will bear, and the internal costs of the company keep growing (it's natural, people want to have more people reporting to them). Remember the CLEC (competeing local exchange carrier) ? Real competition is quite limited, besides the big carriers with each other; it tends to last a while before it kind of goes away or at least gets whittled down. But since phone and data charges are typically a relatively small expense, the market can begrudgingly bear prices far higher than they need to be; at the end of the day you pay the bill and get on with your life. While having a whole different arrangement of small competitors that had technical compatibility would drive prices down and be good in other ways, it's just not that urgent a need. IMHO, the greatest cost is that of the opportunity cost of not having innovation moving as fast as it could, but again, we don't realize it much because the technologies are certainly adequate as they are.

What really is quite silly and annoying is the so tired rehash of about innovative small businesses being the light at the end of the tunnel for employment. Sometime I'll have to write on that, but for now, suffice it to say, some small businesses sell technology and innovation, but the majority of them are low-tech. By definition, high tech is not and can not be the bulk of the economy - people want, need and buy a lot more stuff than just computers, phones and healthcare, and most businesses spend on a lot of things other than those as well. Most small business people understand that whey we speak of small business, we're not only talking about software developers, but shoemakers, welders and anything else as well.

With oil, as is ably pointed out, the infrastructure investment is the highest, arguably, of any business, and the building of refineries, etc., needs to be undertaken by big business. IMHO, what is truly amazing is so many years after JDR Sr., the industry still operates on reasonable margins, and is quite efficient, considering the physical work that is done.

IMHO, what most big companies don't realize, which is surprising given the education level of the thinkers that influence them, is the connection between national societal principles and their effect on small business. Things like religion, family, education, etc., if they are allowed to be inculcated with immoralities, become destructive of small business. Put simply, morality matters. Of course, companies don't "think", corporations are just charters filed with a State. It's the officers, directors and senior management of a corporation that do the thinking, and since they are a product of universities and society, they simply reflect the values that have been impressed upon them.

The idea of smaller companies being a great source of innovation is really the idea of innovative people not being happy working as employees of big companies, a prevalent theme in the business world. In order to preserve the stream of innovation, if big companies were looking at the big picture, they would make a point of trying to avoid buying small vendor companies, even if costs seem a bit high or there are concerns about ownership continuity. Instead, IMHO, it would make the most sense to actually try to assist the smaller vendor with continuity, to try to preserve the flow of innovation without bringing it under the stifling corporate umbrella. But such thinking is rather avant garde to suggest inside big corporations, where the conventional wisdom is to suggest buying small vendors.

It never ceases to amaze me how typically wrong big companies are in their attitudes towards small business (even to the detriment of the big business), and also how big oil is actually, as you point out, one of the best at understanding and working with small business to the benefit of everyone.