Monday, November 22, 2010

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%.

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