Inequality and oligopoly in the network economy

Twelve plants and five animals produce 90% of the world’s food supply. Six corporations provide 90% of the world’s food supply. Two companies dominate the ‘carbonated’ drinks industry and two more the commercial aircraft manufacturing sector; three control the mobile phones market and another three the mobile telecoms infrastructure market; in the manufacturing industries for PCs, beer and  big trucks it’s four companies that dominate; for cars and pharmaceuticals, just 10. These are examples of what Professor Peter Nolan calls ‘systems integrator companies’.

And yet, in the UK the total number of firms has now hit a record 4.8m, with a net rise of half a million small businesses since the start of the crisis.  They account for 96 per cent of all businesses, employ a third of private sector workers, and generate 20 per cent of the private sector’s turnover. The number of micro-businesses (with up to nine staff) is up 40 per cent since 2000. Most of that growth is accounted for by self-employment – sole traders are up 50% since 2000 and 3.6m of the 4.8 firms in the UK are sole traders.

In today’s economy either you’re plugged into the systems integrators – or you’re in a nether economy of minimal margins, low turnover, little or no growth. Is there anything in between?

If you’re not in either of those two you’re part of a rapidly declining public sector, where almost three-quarters of frontline staff and senior managers no longer feel proud to serve the public, while 70% say their morale is at an all-time low.

Somewhere in the cracks between these three lies an inspirational new type of social organisation of self-help and co-operation.

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