Narrator: Today, the largest 1,000 US companies generate nearly half of US private-sector output, giving them enormous influence over the economy and our daily lives. Their size and staying power raise a question: Can any company become a superstar business or are other external conditions beyond a company’s control needed in order to reach a level of dominance?
Yueran Ma: In this research, we hope to understand the life stories and the evolution of the largest American companies.
Narrator: That’s Chicago Booth’s, Yueran Ma. She and her coauthors pieced together records from the largest companies stretching back more than a century.
Yueran Ma: First of all, we need to know what these largest companies are—not just for now, but also over time. Right now, if you want to find out about the largest American companies, you can look up, for example, the Fortune 1000 list on the internet. And the Fortune list started in 1955. So that gives about half a century of coverage. But we also wanted to know the largest American companies going back further—and the earliest list we can find so far is the largest 500 American companies in 1917. And then once we know who they are, we want to look up their stories. We want to know when they were founded in particular. And for that, we first look up companies’ websites. Many companies, about 90 percent of the largest US companies now, have company history websites dedicated to tell their story—when they were founded and for what reason.
Narrator: In manufacturing, a clear pattern stands out. Many of today’s largest US companies were founded between 1880 and 1920. The same cohort dominated the rankings in the 1950s, and even in 1917, when those leaders were only about 30 years old on average. Today they’re roughly a century old. This special generation has persisted even as the specific names at the top have changed.
Yueran Ma: Among the largest 500 US manufacturers in 1955, about only 30 percent remain among the largest 500 today. Whereas on the opposite side, many of the large American manufacturers today like Pepsi and Clorox were actually fairly small back in the days.
Narrator: Other sectors told a different story. In retail and wholesale, there was no dominant generation. The biggest players tended to be about 60–70 years old throughout the 20th century, with constant generational turnover rather than a single cohort taking over. So why didn’t retail have a dominant generation?
Yueran Ma: Retail is like an open book. There’s nothing really special about the largest retailers in terms of their ability to run stores. And even if they figure out something special, others may see how they do things and be able to copy more easily. Nowadays, the largest retailers represent the generation of discount retailers such as Walmart and Costco. So there have been constant generational shifts in retail and wholesale without any dominant generation throughout the 20th century. And along with it, the individual companies at the top have changed a lot as well.
Narrator: So what made manufacturing around the year 1900 so special?
Yueran Ma: A likely possibility is the emergence of new technologies. And as we saw, this special generation in manufacturing emerged around the time of the second Industrial Revolution. And these processes and new technologies allow firms to scale up very quickly. One example is Standard Oil, founded by John D. Rockefeller, who, of course, was the founding donor of the University of Chicago. They invented and implemented large-scale refining technologies that allowed them to produce in very large quantities relative to their predecessors. And they became large very quickly. And so by the time the potential challengers emerged, the first movers already acquired skills they already acquired customer base and distribution channels and experience and other advantages that allowed them to do it better than the potential entrants. And so then they can persist.
Narrator: Looking ahead, services and tech could be writing their own generational chapter.
Yueran Ma: Well, there were not very many large services companies until the 1970s and ‘80s, maybe a few like Dun & Bradstreet. And then with the rise of software and IT, we now today have many large services companies like Alphabet, Microsoft, Meta, and the list go on. A natural question is whether the same story might repeat for the services firms formed through the third Industrial Revolution, the IT revolution since the 1970s and ‘80s.
Narrator: Whether today’s services and tech businesses become a new special generation will take time to know, but the evidence points to one constant. Those who align their entry with real technological shifts gain lasting advantage.
Yueran Ma: There are some decades and some settings where firms have a much better chance to become one of the future superstars. So you better seize opportunity in those important special times. You want to find sectors where new technologies fundamentally change the way companies do things, and those might be particularly good areas for you to start your new venture.
Narrator: In short, superstar companies ride the wave of an industrial revolution—moments when new technology rewrites business logic and lifts, not just companies but entire cohorts.
