Creative Destruction: Composition Of The Top 25 Global Companies Over The Decade

This should be a sequel to our March post A Tectonic Shift In The Global Banking Industry!

But this time, our BEFORE (1999) and TODAY chart, covers the 25 largest global companies in terms of market capitalization.

From Wall Street Journal

Some highlights shown above:

-technology companies dominated the top 25 in 1999

-only 8 of the top 25 during the 1999 remains on the list (the chart enumerates the companies removed from the roster)

-total market cap of the group shrank by 20% in the decade

-China has four of the top 25, in 1999 China has none.

-Iconic CEOs of 1999: Bill Gates of Microsoft, Jack Welch of General Electric, and Carla Fiorina of Hewlett Packard

-Iconic CEOs of 2009: Eric Schmidt of Google, Ratan Tata of the Tata Group (India) and Steve Jobs of Apple

How a shift of this magnitude impact markets?

Economist William Easterly writes, (bold highlights mine)

``One reaction is that free markets are very scary if you were an employee or shareholder of one of the 1999 companies that crashed. OK this kind of destruction scares ALL of us.

``Another reaction is that creative destruction is one of the triumphs of the market. The consumer is king: in 2009, the consumer wants iPhones in their Xmas stocking and not whatever Worldcom had been pretending to be producing. The radical uncertainty of how to please consumers is an argument FOR free markets:

``It is because every individual knows so little and… because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it. (Friedrich Hayek)