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TEXT 2 1 Before reading the text, do the following activities.

a Match the names of the organisations and sites listed in column A to their descriptions listed in column B.

A BPan Am 1 a International Business Machines is a multinational computer,

technology and IT consulting corporation with its headquarters in the US. It is the world’s largest computer company and the largest information technology employer in the world.

IBM 2 b It is a term used to refer to the high technology businesses in the southern part of San Francisco Bay Area, which is the leading high technology centre of the United States.

Silicon Valley 3 c Pan American World Airways was the international airline of the United States. It was founded in 1927 for air mail and passenger service. It became a highly innovative international company using jet aircraft and jumbo jets and computerized reservation systems. It collapsed in 1991.

b Which:

1 is a thriving multinational:

2 includes various businesses:

3 has ceased its activity:

Big is back1 The final years of the last decade saw the

decline of big companies, the outstanding feature of 20th century capitalism. Great names such as Pan Am disappeared, while others survived only through heavy cuts. IBM sacked a quarter of its workforce between 1990 and 1995. Everyone agreed that the future lay with entrepreneurial start-ups such as Yahoo! – which in late 1998 had the same market capitalisation as Boeing.

2 Lately the balance may be shifting again. To a degree, the financial crisis of 2009 is responsible. Governments have been rescuing companies they consider too big to fail while recession has been fatal for smaller and less well-connected firms. Moreover the deregulation that opened protected markets began to go out of fashion before the financial crisis with an increase of regulatory burden on companies of all sizes which may have a negative impact on small companies.

3 Two further developments are shifting the balance of advantage in favour of size. One is an increased awareness of the risk of subcontracting. Toy companies and pet-food firms alike have found that their brands can be spoiled if their suppliers (notably China) turn

out poorly manufactured goods. Big industrial companies have learned that their production cycles can be disrupted if contractors are not up to the mark. A second is the emergence of companies that have discovered how to be entrepreneurial as well as big. These giants are getting better at minimising the costs of size while exploiting its advantages.

4 You might suppose that the return of the mighty, now better equipped to crush the competition, is something to worry about: not necessarily. Big is not always ugly just as small is not always beautiful. Most entrepreneurs dream of turning their start-ups into giants (or at least of selling them to giants for a fortune). There is a symbiosis between large and small. The most successful economic ecosystem contains a variety of big and small companies: Silicon Valley boasts long-established names as well as an ever-changing series of start-ups.

5 Policymakers should both resist an instinctive suspicion of big companies and avoid the old error of embracing national champions. They should use their energies to remove the burdens and barriers which prevent entrepreneurs from starting businesses and turning small companies into big ones.

Source: The Economist

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2 Read the text. What is the main point of the article?

1 Big companies are killing small ones.

2 Present economic trends show big companies making a comeback.

3 Governments should only help big companies.

3 Reorder the paragraphs of this summary of the text below.

a Two further factors for this change are the risk of badly manufactured goods by subcontractors and the fact that big companies have been re-organising to be more entrepreneurial.

b Governments should favour entrepreneurship both for small and large companies.

c Big companies went into decline or disappeared at the end of the 20th century while new more dynamic business ventures appeared on the market.

d In the final part of the first decade of the 21st century this trend changed as a result of the financial crisis, but also because of the re-introduction of regulatory norms.

e The general trend is that of a symbiotic and dynamic merging of big and smaller companies to create productive ecosystems.

4 Match the words and phrases in list A to their explanations in list B.

A B

workforce 1 a the total market value of a firm

start-up 2 b the process of removing economic constraints imposed by government

market capitalisation 3 c all the people employed in a firm

deregulation 4 d giving a portion of production to another firm

subcontracting 5 e new business organisation

5 Answer the following questions.

1 Which example of successful start-up is given?

2 How does an increase in regulatory constraints affect small companies?

3 What example of negative subcontracting is mentioned?

4 In what way is Silicon Valley a successful economic ecosystem?

6 Write a paragraph summarising the main point of the article.