The role of entrepreneurship in society has changed drastically over the last half-century. During the immediate post-World WarII period the importance of entrepreneurship seemed to be fading away. When Jean Jacques Servan-Schreiber (1968: 159) warned Europeans of the American Challenge in 1968, it was not from small entrepreneurial firms, but exactly the opposite – from the “dynamism, organisation, innovation, and boldness that characterize the giant American corporations.” By that time, a generation of scholars had systematically documented and supported the conclusion of Joseph A. Schumpeter (1942: 106): “What we have got to accept is that the large-scale establishment or unit of control has come to be the most powerful engine of progress and in particular of the long-run expansion of output.” John Kenneth Galbraith (1956: 86) put it this way: “There is no more pleasant fiction than that technological change is the product of the matchless ingenuity of the small man forced by competition to employ his wits to better his neighbor.” Servan-Schreiber (1968: 159) thus prescribed that Europeans create “large industrial units which are able both in size and management to compete with the American giants.”

Public policy toward business in this period revolved around finding solutions to the perceived trade-off between scale and efficiency on the one hand, and decentralization and inefficiency on the other hand. The three main policy mechanisms deployed to achieve the required balance in the industrialized countries were antitrust (or competition policy, as it was called in Europe), regulation, and public ownership of business.