[m0th87]

I would argue the exact opposite: larger companies tend to have enough resources floating around to be able to perform research. e.g. Bell Labs, PARC, Watson, BBN...

VCs have their place, but they fund ideas with shorter runways. It's the opposite model to research.

[mathattack]

They have the resources to invest, but struggle to commercialize. This is why so many of Xerox's great inventions were commercialized elsewhere. Even when they have success stories (ibm's first PCs) they are usually hives off from the rest of the firm.

Smaller firms lack development dollars but have more flexibility in finding a market niche. For early stage innovation, being small also can force simplicity.