One argument is that small companies can't out-compete big companies in efficiency due to lack of resources, therefore patents give them the necessary time to bring their products to market.

However I never found that argument to be believable. Big companies have such a vast patents portfolio that it's impossible for small companies that try to create a product to not infringe on anything. So what happens many times in practice are actually cross-licensing deals.

Therefore small companies developing some innovative algorithm or technology are better off keeping it a trade secret until launch.