Industry "Clusters"

When I first presented a paper on West Michigan companies over 100 years old that we had surveyed, one question I received from a colleague was whether certain industries lent themselves to longevity. Perhaps some industries are less affected by economic downturns, global competition, etc. It certainly is the case that many local old companies are retail stores or otherwise service-related. Therefore, I was very surprised when we analyzed our national data base of 100 year old companies to discover that over 40% of the companies were in manufacturing! This is even more remarkable when we note that only 4% of U.S. businesses in general are classified as manufacturing.

Of the 18 U.S. Bureau of Labor Statistics NAICS industry classifications, "old" companies clustered into six: Manufacturing, Mining, Utilities, Information, Finance & Insurance, and Management Services. These were the industries where the old companies had a significantly higher representation than in the U.S. business population overall. (Including the Management Services category in this list is misleading since there was no number reported in the U.S. Census data.) The highest percentages of old companies are found in Manufacturing (41.95%), Finance & Insurance (17.8%) and Retail (12.44%). All other categories were less than 6%.

Old Companies DO Grow Large!

Because so many of the 100-year-old local companies I had interviewed were small (less than 100 employees), I had surmised that many old companies tend to remain small - a result, perhaps, of an emphasis on survival rather than growth. However, once we assembled our data base of U.S. companies over 100 years old, we discovered that only about one-third of the companies would be considered "small" (under 100 employees). We know that we are missing many small local companies that simply haven't come to our attention and are not in any of the state records we have been able to find, but this still is a far smaller percentage than for U.S. companies overall (where over 95% of the companies have under 100 employees).

However, over 50% of the companies in our data base are "large" - over 500 employees - compared with only 1% (or less) of U.S. companies overall. The only size category where old companies and all U.S. companies appear to be similar is that of medium-sized businesses - those with 100-500 employees.

Public v.s Private

Interviews with local (that is, West Michigan) 100-year-old companies indicated that remaining privately-owned was a key factor in company survival over the long term. (Many of those interviewed were adamant about this!) We decided to test that theory on our new data base of over 400 old companies from throughout the U.S. Turns out 62% of these old companies are privately-held, with 38% being publicly-traded. This sounds as if the theory proves out until one compares these numbers with U.S. companies in general, where well over 90% of firms are private!

Association of Global Business Conference

I'll be presenting the findings of our data base research on 100 year old U.S. companies at the AGB conference in New Orleans this weekend. Great thanks to student researcher, Katelyn Rumsey, for all the hard work on "scrubbing" the company list for accuracy! Comparing relative size, industry, and private/public ownership of "old" companies with U.S. companies overall show some very interesting results! I'll post this information next week.