Edit: This question attracted way more interest than I hoped for! I will need some time to go through the comments in the next days, thanks for your efforts everyone. One thing I could grasp from the answers already - it seems to be complicated. There is no one fits all answer.
Under capitalism, it seems companies always need to grow bigger. Why can’t they just say, okay, we have 100 employees and produce a nice product for a specific market and that’s fine?
Or is this only a US megacorp thing where they need to grow to satisfy their shareholders?
Let’s ignore that most of the times the small companies get bought by the large ones.
…and local businesses constantly close in favour of big companies, as countries develop the amount of self-employed people goes down:
Local businesses simply cannot outcompete ever-growing big businesses, and because big businesses are in a need to ever-grow to satisfy the raising stock value imperative, they inevitably intrude the market share of local businesses. This is well-known since the mid-1800s.
Hm, I would expect that to be true, as in “where a McDonalds opens up, there’s less demand for local family owned restaurants”, but I would not take the rate of self employment as proof.
In developed countries exist more laws against pretended self-employment and more small businesses incorporate, thus lowering those numbers.