Opportunity

The UK economy is strong in size, services, talent & creativity, but low productivity, high debt (government and personal), regional gaps, inequality and fragile supply chains caused by Brexit hold it back.

To address productivity, the obvious solution is automation or AI, but that has the unintended consequence of increased unemployment, which is an obvious vote loser. Productivity is measured by GDP  or GDP per capita, but it a broad brush measure, as it is an average and does not reflect inequality, which would grow with unemployment.

How about a thought experiment and see where it leads us?

What about limiting the size of companies? After all, competition, as we're continuously told, is the handmaiden of innovation. Having a plethora of companies competing against each other would stimulate competition on more than just price, as well as opening up job opportunities. Napoleon famously called the English a nation of shopkeepers, meaning small businesses, which was actually a strength at the time.

It would also prevent companies becoming so large that they are able to influence government policy in their favour, or obtaining the benefits of scale that allow them to use fewer people, meaning they have to use existing people more efficiently.

The problem is that some political parties get the majority of their funding from the large companies, so expecting them to implement regulations on the size of companies is a non-starter for them.

Exporting may be an issue for smaller companies, but if innovation is improved, then exports should follow, even if at a higher price.

Large companies merge, not to innovate, but to reduce cost or remove competition. That said, they do sometimes buy other parts of the value chain or synergistic products.

Weaknesses of the analysis? Oversimplification of solutions, which is perennial problem.

Limiting company size is a complex issue with potential unintended consequences, such as stifling growth, reducing investment, and impacting competitiveness. 

The claim that innovation improves exports and justifies higher prices requires further evidence and nuanced consideration of global market dynamics. 

While automation and AI raise concerns about unemployment, focusing on upskilling and training could mitigate these issues, but there's a limit to upskilling people you have no jobs for; you just end up with a large pool of very skilled unemployed people who would probably go abroad to seek a job. Additionally, policies promoting entrepreneurship and small business development might be more effective than limiting company size. 

Impact on specific industries: Different industries have varying economies of scale and competition dynamics. A one-size-fits-all approach to limiting company size could harm certain sectors. 

Enforcement challenges: Effectively monitoring and enforcing size limitations would be a significant logistical and regulatory challenge, although level of profits would be a good start.

International context: The UK operates within a globalized economy. Policies should be considered in the context of international competition and trade agreements.