Let's look more at the case of high frequency trading. Sure, that's a technological innovation. But it's an innovation that only large firms with significant technological prowess can enjoy. Smaller trading firms, for example, probably don't have the infrastructure to engage in the practice. As a result, they don't see as much profit. That additional profit keeps the big firms growing faster than the smaller firms.Our response
So.....What? This is not limited to high frequency trading -- so lets ignore that point. This sort of thing happens in every avenue of business where a significant investment can ensure a firm an advantage over a rival who may not be able to afford such advances. The argument is pointless. Every company, no matter the size is relatively smaller or larger than another firm and thus has more or fewer resources to work with. Larger firms always have an advantage over smaller firms but that advantage is rarely insurmountable.
Wal-Mart, the worlds largest retailer was once the world's smallest retailer. They found a flaw with their larger competitors and exploited it. The key to this cycle working is not having a get out of jail card when you do something stupid (like, say, bailing out the financial firms).
We could go on...