As far as I can tell, small businesses are inefficient
As someone who has worked for both small and large tech companies, I would actually argue that the opposite is true.
Smaller companies are far more nimble and have faster turnaround time for product to market. Larger companies generally invoke large amounts of bureaucracy in their day to day activities. Additionally, people have more specialized roles in larger companies while smaller ones can distribute the workload to people who are more the 'jack of all trades' type individuals.
I guess one can argue that duplication of efforts in several smaller business can appear as though their is 'inefficiency'. If two companies merge for example, there is usually attrition in the HR orgs for example as some workers jobs become redundant. Although I would state that isn't really an example of inefficiency; it is more one of cost consolidation.