Emerginvest Blog

To further augment the global shift in largest corporations, the top corporations by growth were heavily dominated by non-US and Japanese companies. Four of the top 10 spots of corporations by largest % increases in revenue were held by US firms. However of the next 20 (#’s 11-30), only one more US-based firm appeared on the list – Bunge at #27. Therefore, only 5 of the top 30 spots were US-held, and the majority of the rest were held by emerging countries such as Taiwan, India, China, and Spain (to name a few).

The top companies by % increase in profits tells an even stronger story: (http://money.cnn.com/magazines/fortune/global500/2008/performers/companies/fastgrowprofits/index.html).

None of the top 39 companies by % increase in profits were US-based. In my mind, that is shocking, considering that the US controls 30.6% of the entire list. Most of those top 39 spots were held by emerging and developed markets like Taiwan, South Korea, France, the UK, and of course, China. Speaking of which, China completely dominated this list, holding 3 of the top 5 spots, and 10 of the top 25. While this is not a good indicator of aggregation of wealth, nor is it a list of simply the most profitable companies, it still clearly demonstrates how many emerging market countries are gaining economic ground extremely quickly.

Lastly, of those top 500 companies which posted the largest losses, 9 of the top 12 spots were held by US firms (the other three were KFW Bankengruppe from Germany, UBS – Switzerland, and Alcatel-Lucent from France). Of the total $108.3B lost by these 12 companies, $91.4B, or 84.4% was incurred by US-based firms. General Motors and Sprint (the top 2 largest money losers) accounted for $68.3B, or 63.1% alone. I choose to highlight these companies because I feel like they provide a stark contrast to the previous set (the highest % growth in profits). While the profits derived by the former group are significantly lower than their largest money-losing counterparts (the top 12 companies by % increase in profits garnered only $37.97B in profits combined), it demonstrates that many of the largest declining companies worldwide are US-based.

In conclusion, the report demonstrates a significant shift in economic movement in terms of the world’s largest corporations (according to Fortune) from US to emerging and world markets. This is evidenced by the shift in total number of top 500 companies away from the US to other countries, the US-dominated list of top money-losing companies, as well as by the fastest growing companies by % change in profitability worldwide (where China dominated 10 of top 25 companies and no US-based firm appeared until the 40^th spot). In our view, this helps to underscore the substantial, and fast-growing opportunities in foreign market economies. While some foreign markets have faltered in the last few months, there are strong signs (like those highlighted here), that world markets will continue to outpace the US economy in what seems like a natural flow of capital to these fast-developing nations.