Dr Jeff Cornwall

I found an article that reminded me of a lecture from an Economics course I took about 30 some odd years ago. (I often can’t remember where I put my cell phone, but somehow remember what this professor taught us that day….). His point was that new competitors are not always a bad thing for a business. They can actually create more attention for all competitors fighting for market share and possibly even a bigger market for all to share.
Office of Advocacy of the U.S. Small Business Administration released a working paper that examines how the entrance of new establishments within a 150-mile radius of young firms affects the existing firms’ profitability. The findings? New entrants in local economies at first harm, then help, already existing firms.
“The benefits from a growing and dynamic local economy are clear,” said Dr. Chad Moutray, Chief Economist for the Office of Advocacy. “For local business, in the short term new entrants are competitive foes, but in a few short years they learn to cooperate with each other.”
An entrepreneurial economy seems to lift all boats as it grows. What is interesting is how as businesses get larger, they often look to governments for protection from market competition. This study suggests that when left alone, entrepreneurial market places work well when governments keep their hands off.