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Some enterprises can trace their direct lineage back through many centuries. But the trend is for rise-and-fall cycles to become shorter — over the past half-century the average length of time a company is in the US S&P 500 index has fallen from more than 60 years to just 18. Globally, some see big companies’ longevity returning to the pattern of the 19th and early 20th centuries, before trade rules and legal changes helped create a bulge of long-lived companies.
This magazine, crowning a series of Financial Times conferences and videos, draws on the breadth and depth of FT writers to examine what it takes for companies to survive. There are stark regional variations: the number of companies older than 200 years is vastly higher in Japan than in Germany, its closest rival. There are sectoral norms, with the ranks of businesses catering to everyday needs — such as drinking and accommodation — heavy with survivors. And structure and governance can have an effect on survival rates. Family-owned businesses, for example, are claimed to last longer as well as perform better than others.
Then there are the factors that can cut short a company’s life, including the rising levels of environmental and political risk that are transforming the way companies do business, explored in this magazine by specialist columnists. Technology has immense and increasing power to disrupt expectations of corporate life, too.
No business exists in a vacuum. Trade barriers have played a large part in extending some companies’ lives — and cutting short those of others. The power of political backing is perhaps most starkly illustrated by the boost it gave to trading organisations such as the UK’s East India Company, but there are many other examples.
A theme that comes up again and again in the stories of long-lived companies is flexibility — the ability to adapt, quickly, to changing circumstances.
But cutting through this and every factor is whether corporate longevity is always a good thing. An academic who attended the FT’s New York event said that companies would always emerge to replace those that fall by the wayside. Others say that a clear vision is more important than focusing on survival. But a clear vision can also make longevity more likely.
The articles in this magazine contain a number of examples showing how easily companies can flounder. But they also provide many pointers, drawn from the past and present, about how companies can ensure they have a long future.
Lionel Barber is the editor of the FT