Is there any way of escaping the corporate predators?

NOBODY seems to be safe from the corporate Goliaths. Across the business landscape, from the music and software industries through publishing to the restaurant trade and even accountancy, the behemoths are cramming smaller rivals into their maws. Is monopoly capitalism triumphant at last, the US Justice Department's suit against Microsoft just a brave, doomed last stand?

It's the obvious conclusion - but the wrong one. The ostentatious display of strength by today's giant corporations actually reveals their weakness. They are gobbling smaller rivals because the small companies have an essential ingredient that they don't possess; the ability to innovate, the ultimate source of profit in growth industries.

Big is certainly still beautiful in some ways, or gigantism would not be such a widespread phenomenon. It is as if Adam Smith's invisible hand has shaken the economic kaleidoscope, rearranging all sorts of industries into a pattern of a handful of mega-companies surrounded by a constellation of much smaller independent outfits. The number of giants is shrinking, and the biggest of them are constantly feeding their appetite with a steady diet of tiddlers.

The recent takeover of Polygram by Seagram put the spotlight on these developments in the music business. It is now dominated by six - perhaps soon to be five - majors such as Polygram and Sony. Independents like Creation Records and Putumayo hold on to about a fifth of the world market, but the giants hold a stake in many of these. Sony owns nearly half of Creation, for example. Publishing has been undergoing the same sort of process of concentration, leaving the remaining independents either vulnerable to predators or stuck in a small niche.

Independence in other industries is even more ephemeral. Take biotechnology, for example. There are numerous start-ups, many born out of the university science parks. The majority have a short life.

If they do not go belly-up in their first few years, the odds are they will be bought by a pharmaceuticals giant or, at the very least, be taken into the corporate fold through joint venture agreements. The same is true of most high-tech and software startups. It even applies to restaurants. Small, successful groups like Cafe Pelican in the end find themselves becoming somebody else's tasty morsels - Whitbread's in its case.

There is nothing new about takeover waves as such. The difference this time is that small businesses appear to have no alternatives. Either they can sell up or they get squeezed out. Organic growth is off the menu. The explanation lies in the increasing importance of marketing and distribution. There are huge economies of scale in being able to tap into the global market, and in being able to create a world-wide brand. The bigger the advertising and distribution budget can make the market, the higher the profits. This creates a strong incentive for mergers and takeovers, leaving a few dominant corporations in each business.

The problem for the corporate giants is that they are all dressed up with nowhere to go. They have the size and muscle, the global reach and the huge advertising budgets. But they need to have a constant flow of things to sell if they are to profit from their scale. Brawn is no good without brain, especially in creative and "knowledge-based" industries. Their solution: buy in the brains.

This is the real reason the big fish are gobbling up the minnows. They can not generate enough products - enough new bands, new scientific breakthroughs or new authors by themselves. Large organisations are inherently bad at managing creative types or boffins - who are, indeed, inherently bad at being managed. Worse, in some businesses, the innovators and creators are actively hostile to the big boys. Many's the up-and-coming cool software genius who wants nothing to do with Microsoft. The only way to get at this bolshy talent is to buy the smaller company that can access it.

So what looks like overweening behaviour on the part of mega-corporations should be great news for the talent. While the barriers to anybody who wants to compete head-to-head with today's corporate giants for access to the global marketplace are enormous, possibly insurmountable, it is relatively easy to get into the business of creating something to sell to the mammoths that they badly, badly want. There are big profits out there for the taking, and the fact that so many industries are undergoing a process of concentration at the top does not mean that the profits will inevitably fall into their hands.

Rather, there is an opportunity for the people who have what a knowledge- based economy is based on - namely, ideas - to exploit the desperation of big companies to acquire this scarce resource.

The real monopolists are not those who wield huge amounts of finance capital, for there is plenty of that around. It is what economists like to call human capital that is in short supply, but that description is misleading. "Labour" might be a better name for it, although obviously labour of a specific kind.

In this very modern version of class warfare, pitting monopoly capital against the knowledge workers, the human beings still have an advantage over the corporations. It takes a good idea and a bit of entrepreneurial spirit to start up a small business that will have big businesses falling over each other to buy it up.

The longer corporate appetites remain ravenous, the richer it will make the little guys.