Creative Destruction, Dynamic Markets, and Winner-Take-All Capitalism

US companies are moving toward an increasingly concentrated market and are scooping up a larger percentage of profits, according to research summed up in the Wall Street Journal. “Twenty years ago, the US had more than 7,000 public companies; today, it’s less than 4,000.” In 1996, “the 25 companies in the S&P 500 with the highest net profit margins earned a median of just under 21 cents on every dollar of sales. Last year, the top 25 such companies earned a media of 39 cents on the dollar.” However, the WSJ analysis warns that  “winner-take-all” capitalism is a very temporary state, thanks to the investment cost and the rapid pace of technological innovation. Time for a re-set of basic market assumptions—again.

John Howell, Editorial Director

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