1. Class 7 Size of companies as a factor to innovate
Prof. Paulo Feldmann

2. The reason why the great inducer of R&D in the world is the large company
The conclusion of many different studies shows that the more larger companies exist in a given country the more that country will spend on R&D and, likewise, the greater the number of patents/innovations .

3. Is there any relation between size of firm and innovation?
Two streams of thoughts:
Small firms are important to innovation
Schumpeter’s early works [e.g., The Theory of Economic Development,1912]
Large firms are important to innovation
Schumpeter’s late works [e.g., Capitalism, Socialism and Democracy, 1943]
John K. Galbraith [e.g., The New Industrial State, 1967]

4. Innovation and Size
Small firms might have some advantages on the earlier stages of inventive work, but large firms are more efficient
There are some types of innovation which are beyond the resources of the small firm (e.g. aerospace, nuclear reactor, pharmaceutical, cement, glass, steel, shipbuilding, etc)
Small firms are more flexible and have good internal communication skills, but large firms are structured, have access to finance and the ability to cope with government regulation

5. R&D Expenditure and Size
R&D expenditure is highly concentrated and performed in large firms
98% of small firms did not perform any specialized R&D program

6. Patents are very expensive
Invention and Size
Patents are very expensive
Propensity to patent among firms and industries are different
Some large firms may rely on secrecy and/or internal policies to keep secrets

7. The future tendency
Large companies will stimulate start ups and aquire them after the innovation becomes mature