Oct 022013
 

This is a shop in Aspern, a part of Vienna just east of where I live and work. I have no idea how well they do and I certainly hope they do just fine, but fact is, most shops in a similar position, being small to mid-sized, being situated in a city center or the center of a district, being without any option to grow, most such shops don’t do particularly well.

And once they’re gone? Of course we regret their demise, but instead of keeping them alive by actually buying there, we spend our money in big shopping centers or online. In a way this is OK, because is it not just change? On the other hand, feeding only the big players kills diversity.

What’s the alternative, you ask? Well, regulation is it. It does not work particularly well in the US telecommunication sector, where there are not enough players to keep this big market healthy, but in Austria it works pretty well. In a market of 8 million people we had until recently four major mobile networks, each with a discount variant. Recently #3 and #4 have merged, but there is still a lot of healthy competition and the networks have reasonable coverage and performance. The downside of fragmentation in telecommunications is of course roaming, but still, consumers in Austria are well off with the current system.

What could regulation mean in other segments you ask? And how would it stop the vanishing of traditional shops and prevent powerful monopolies? Could it?

Honestly, I have no idea, but the example of phone companies shows, that regulation does not automatically mean less choices. If well done, it can very much be the other way round.

The Song of the Day is again by Paul Weller, this time from his Style Council album “Our Favourite Shop”. Hear it on YouTube.

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