Large companies are disappearing at a much younger age than they used to. According to a study by management consulting firm McKinsey, the average lifespan of a company on the S&P 500 list of the publicly traded enterprises was 61 years in the late 1950s. In 2016, it had fallen to just 18 years. Today, companies are merged, bought-out, or simply go belly up at a much faster pace than they used to.
The longevity of companies on another index, the Fortune 500, which compiles the largest 500 U.S. publicly traded and private corporations based on revenue, is comparable to S&P 500 corporations, according to Mark Perry, senior fellow of the right-leaning American Enterprise Institute. Perry found that in 2019, only 52 companies have been on the Fortune 500 list since its inception in 1955.
Why only about one in 10 of these companies have lasted for at least 64 years is a matter of academic discussion. One popular explanation is the concept of creative destruction, which says that in order to innovate, we need to dismantle the old. Companies, therefore, cease to exist (at least in their original configurations) when they’re supplanted by companies involved in newer industries and innovations. (These are the most innovative companies in 2021.)
We live in a time of accelerated technological disruption and record-high merger and acquisition activity, too, which might help to explain why modern large companies have shorter lifespans than they used to.
So, what about the stalwarts, the oldest companies? Why is Bank of New York Mellon, founded by Alexander Hamilton in 1784, still around? Part of the reason is that companies in certain industries benefit from their longevity. Fortune 500 companies involved in financial services (like Edward Jones) and energy (like Exxon) tend to have older foundation dates, for example.
The largest, newest companies (think Amazon, Alphabet, and Apple) tend to be involved in the latest innovations and newest industries. The youngest company on our list is over 150 years old. Apple is not even 50. (These are America’s most hated companies.)
To determine the oldest companies in the Fortune 500, 24/7 Wall St. reviewed data on Fortune’s website. Companies in the 2021 Fortune 500 were ranked based on founding date. Data on annual revenue and number of employees also came from Fortune.
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