How do large corporations benefit from the presence of small businesses?

While it depends what type of small business, the following applies for most BUT NOT ALL businesses.

Large Corporations and small businesses exist in an ecosystem. They might depend on one another in many ways, including but not limited to the Supply Chain, Innovation, Customers, and Workforce.

Large Corporations need supplies to create their desired product. To do this they contact smaller businesses to manufacturer their products. Example: Large Circuit Board Manufacturers require machinery to create it, and most machinery for the creation of these boards is made by small businesses like AMSSB.

Large Corporations usually produce a specific product in bulk, never doing major changes or really innovating something new. Small businesses represent creativity, and corporations search for small businesses to acquire rather then innovate using their research and dev team.

Small companies form an essential customer base for many big businesses, especially service-oriented companies. Many large corporations such as Xerox or Bank of America create specialized small business service solutions expressly to cultivate this sector of the market. Large manufacturers also outsource sales to smaller companies, who undertake the final step of retailing products to consumers.

There tends to be a revolving door between large and small businesses in similar industry when it comes to workforce talent. Young workers with energy and ideas might get their start at a small business. Once they’ve gained experience, the longer career ladder and better benefits at a corporation could tempt them to make a move. Thus, the big business benefits from the training provided by smaller companies.

answer; rapid growth in buyer demand and high buyer switching cost;