There was new blood in the latest World Series: The Texas Rangers had never been in the series, and the San Francisco Giants hadn’t been there in almost a decade. And, says N.C. State University economist (and baseball fan) Mike Walden, there’s also new blood in business.
“I think this is contrary to what a lot of people think. They think, ‘Well, if the business is big, they are going to dominate forever.’ And actually it isn’t true.
“A researcher recently looked at the popular Fortune 500 ranking of businesses. Essentially what that does is it ranks the top 500 companies in terms of various measures of size, sales, revenue, et cetera. And what this researcher found is only 62 out of the 500 companies remained on that list (from) when it was first published in 1955 — only 62. Most of them are gone off the list. Almost 2,000 companies have appeared at some time on that list and then went off. And in just the past two years, 71 companies have dropped from the top 500 list.
“So I think what this tells us is we live in a very dynamic economy. Companies that were on top years ago may not be on top today, and companies we never had heard of — like Microsoft — a generation ago … can get on that top list. And I think this means that companies have to constantly work hard to reinvent themselves and maintain the loyalty of their customers.”