Big firm, little firm: are differences between companies driving inequality and holding back growth?

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Debates about inequality often focus on inequalities between people. But what about inequalities between firms?

Recent decades have seen the emergence of giant, multinational firms - the FAANGs of this world. But over 40% of registered businesses in the UK have less than 10 employees.

What do we mean when we talk about inequality between firms? Are inequalities between firms limiting UK business dynamism? And do governments need to step in and enforce competition rules?

Joining us this episode are John Van Reenen, Ronald Coase Chair in Economics and School Professor at the LSE, and Amelia Fletcher, Professor of Competition Policy at Norwich Business School.

Zooming In: discussion questions

Every week, we share a set of questions designed for A Level economics students to discuss, written by teacher Will Haines.

1. Outline three reasons why we should be concerned about inequality between firms.
2. John Van Reenan refers to the network effect and the Tesco effect. Explain how these two effects result in the inequality between firms increasing.
3. Amelia Fletcher suggests that competition authorities have been reluctant to intervene in the technology market. To what extent do you believe this approach leads to better outcomes for consumers and workers?