Creative destruction - do small firms need support?

We live in an unfair world, but fairness has very little to do with the answer to most problems.

Small companies provide a lot of employment, contribute taxes, and are large providers of innovation and growth.

They did not seem to figure in the recent election - but may well be centre piece to any recovery.

On one hand recent announcements of government funds may have their advantages. These funds may have crowded out many firms from competing fairly. Equally supporting industries or companies in markets that no longer "function" is more of a museum piece than looking after our future. Cuts in largely ineffective grants on small firm training, support, and even the SME adjudicator may be welcome.

That said - Labour stands for unions, Conservatives for big business. There is money in lobbying - if you are big enough. This is surely where the disadvantage lies. SME's do not have the funds or influence to compete.

Perhaps in our new world the Conservatives will pay back the £12m donated to them during the first quarter of 2010. What was it for? It was larger than all the other funds of all the other parties put together (If they were McDonald's they would have had a majority parliament)

Creative Destruction is about new ideas replacing old ones. New methods, new products, new services. Removing everything in its path will enable the process to work more quickly. This means if there is a bonfire of quangos and regulatory authorities (presumably had nothing to do with donations), unless there is a sharper tooled device to stop monopolies from abusing their powers, they will.

Consider the energy market. Among the cuts announced today were the withdrawals of grants to micro renewables. The Carbon Trust has "suspended" the call for research into renewable energy (£22m). Nuclear Power R+D is said to be worth £60m a year (has that been suspended also?).

The question was "do small firms need support?". If you asked a large company the answer would be "no". If you asked a Union - the answer would be "no". Both sets of people are linked to the stock exchange and the long term performance of shares and pensions. Why would they want replacement?

The economic justification for long term growth and the link with entrepreneurs or small companies is only every made when times are really bad. At the moment there seem to be some cuts and some agendas. Not helpful for anyone.