America’s corporate giants are getting harder to topple

ATTEND any business conference or open any management book and an encounter with some variation of the same message is almost guaranteed: the pace of change in business is accelerating, and no one is safe from disruption. Recent breakthroughs in artificial intelligence (AI) have left many corporate Goliaths nervously anticipating David’s sling, fearing that they might meet the same fate as companies such as Kodak and Blockbuster, two giants that were felled by the digital revolution.

The Innovator’s Dilemma, a seminal book written in 1997 by Clayton Christensen, a management guru, observed that incumbents hesitate to pursue radical innovations that would make their products or services cheaper or more convenient, for fear of denting the profitability of their existing businesses. In the midst of technological upheaval, that creates an opening for upstarts unencumbered by such considerations. Yet the reality is that America Inc has experienced surprisingly little competitive disruption during the age of the Internet. Incumbents appear to have become more secure, not less. And there is good reason to believe they will remain atop their perches.

Consider the Fortune 500, America’s largest companies by revenue, ranging from Walmart to Wells Fargo. Accounting for roughly a fifth of employment, half of sales, and two-thirds of profits, they form the backbone of corporate America. The Economist has examined the age of each firm, taking into account the mergers and spin-offs that paint an artificially youthful picture of the group.