Innovation, Life Cycle and the Share of Independents: Cases from Retailing

Dr. Bart Nooteboom is research director at the Research Institute for Small and Medium Sized Business in the Netherlands. There is some empirical evidence for the thesis that society depends to a large extent on the initiative of small, independent entrepreneurs for innovation. But it can also be argued that some types of innovation are a matter for teams of highly skilled specialists and that they require long lead times, heavy investment and large risks, which can only be carried by large firms. It can also be argued that small and medium sized firms are in fact trial grounds for the large firms. In this paper the development of new forms of retail distribution are examined; the development of self-service, supermarkets and discount stores in the retail trade of general foods. The author assesses the innovative contribution of small and large firms in this area and concludes that in the process of innovation and diffusion small and medium sized firms and large business play different and partly complementary roles.