If you’re curious about the story of modern humanity, you’ll find few things more fascinating than the shapeshifting ways of our markets and industries, over many years and decades. These shifts reflect our whole society, our inspiration, our impulses, and our shortcomings. These shifts are us, as we make history, step by step, dollar by dollar, in good ways and in bad.
There is no data to show
Witness the evolution of top industries over five decades. We reviewed the top 20 companies of the Fortune 500, from 1965 to 2015. For each year, we grouped companies by industry and calculated that industry’s revenue within the top 20.
Based on annual reports by Fortune magazine, and self-identification by various companies, we assigned industry categories to each company listed in the top twenty of the “Fortune 500” list published by Fortune. We aggregated individual company revenues for each industry category, for each year listed. In some cases we segmented the revenue of large conglomerates into multiple industries, based on readily available data for a company’s evolving segmentation over time. Those instances are indicated in detail below.
In four instances, a conglomerate appeared in the top twenty of the “Fortune 500” list but we excluded it from our analysis. In these cases the company was either too diverse to register significant influence over the fluctuation of industries under our consideration, or it was too reliant on “investments” as a primary source of revenue, to be fairly compared with other industries under consideration. These instances include:
- LTV (1970)
- Berkshire Hathaway (2005, 2010, 2015)
- GE (“Investments” segment of revenue only, 1990 through 2015)
We also excluded Eastman Kodak, occupant of the eighteenth spot on 1990’s “Fortune 500” list, because the resulting photography category would be exceedingly small and only appear for one year.
Several instances of aggregated industry revenue were excluded in given years, due to their inability to register visually on our established scale. Because they were so small at a given time, but sure to appear elsewhere in our timeline, we deemed their presence momentarily insignificant to the narrative and excluded them. In each instance, the aggregated industry revenue was below a mark of $20 billion:
- Media ($17 billion)
- Food and beverage ($10 billion)
- Insurance ($5 billion)
- Manufacturing ($18 billion)
There’s a reason General Electric (GE) is one of the most revered and enduring companies in human history–they do a lot of different things well. GE appears in the top ten of Fortune’s “Fortune 500” list each year we’ve analyzed, earning substantial revenue across many major industry categories. This created for us “The GE Issue.” We were faced with the challenge of displaying an accurate narrative of industry fluctuation, giving company-level credit wherever it is due, but also avoiding an outcome where one company dominates the narrative at the expense of other insight.
As a result, we made a good faith effort, based on readily available data, to establish what portions of GE revenue in given years belong in what industry categories. For each year surveyed, all GE revenue is absorbed into as many as four categories, including energy, manufacturing, computers and health. In instances when a measurable segment of GE revenue either fell below the $20 billion threshold, or was categorized as diversified investments, that revenue was excluded.
We applied these same standards in one other case, to Esmark in 1965, absorbing its revenue into the oil, insurance and food and beverage categories.
Industry is always evolving. What works and helps companies thrive in one decade doesn’t guarantee success in the next. Any businessperson or economist will tell you, the ability to adapt to unpredictable factors—market whims, technology, public perception, regulations—will be the surest determinant of success for any company or industry.
Considering our analysis, confined to the grounds of the top 20 slots in the annual “Fortune 500” list, one initial observation to be made is how many industries have boomed in or around 1995, when the Internet became a mainstay in today’s modern culture. The retail industry, especially, exploded, and remains steadily increasing, thanks in part to companies like Amazon (founded in 1994) and Apple, which introduced the first smartphone in 2001. But it wasn’t those companies that drove the boom. It was, of course, Walmart, the king of all brick and mortar business in America.
But retail dollars have shifted, dramatically. While this growth has occurred, so many other companies have perished. Sears is one of the most notable examples of a struggling giant—once a perennial player in the upper echelon of the Fortune 500, the company has strained to stay relevant and top-of-mind over the last decade.
Also fascinating is the sheer dominance of industries upheld by our unending impulse to move about—the auto and oil industries. Upon casual reflection, many may assume that giants in computer technology and communications and pharmaceuticals have caught up to these relative dinosaurs, but they haven’t. Not even close. For all the talk about rising stars and fast-changing markets, the old guard definitely remains.
Also of note, the banking industry saw explosive growth through the year 2010, but then declined sharply by 2015. But that’s not to say the financial crisis crippled the industry for good, or even had a lasting impact on its overall size. The one stable inference that can be gleaned from this is that banks are changing the ways they do business, and the ways they consolidate their opportunities. A primary catalyst for this was Dodd-Frank being signed into law in 2010, effectively limiting the powers of banks within the markets.
The healthcare industry has tripled its size and dominance in the last 15 years and is currently in the top three of the most dominant industries (behind oil, and just a hair behind retail). Insurance and healthcare have benefitted immensely from the advent of the Internet, perhaps creating a symbiotic relationship with the computer industry, which itself went from stable progress to explosive advancements in the last two decades.
The telecom and energy industries have remained stable and relatively small, with telecom progressing as smartphones and other mobile devices continue to embed in modern society. Energy is steady yet small, with a short burst of growth in 2000, when twice as many companies were represented. It’s safe to say the Industrial Age has given way to the Information Age, once and for all. It will be interesting to see how energy fares in the immediate and distant future, as more attention is paid to renewable resources and more efficient channels.
There are some surprises to note from this study, too. Media, as much as it’s in our faces, every day, seems unexpectedly small. Also, the food and beverage—again, constantly in our faces (and mouths), seems unexpectedly small. Over the past five decades, the food industry’s aggregate revenue at the top of Fortune’s list went from small to non-existent back to a major boom in the past five years. This could be attributed, as much as anything, to consolidation of industry giants. As much as it may seem on the surface that the food industry is trending towards small batches and local sourcing, there’s almost always another story lurking beneath the surface.
As technology and innovation continue to shape how businesses are created and maintained, one thing is for certain… there’s almost no telling where these bubbles will be the next 50 years!