Do you ever think about the size and impact of the corporation you, your friends, family members or neighbors work for? If you do, the size might amaze you. Thinking this way offers a whole new perspective on global markets as the revenues of some of the world’s largest corporations are far bigger than the GDPs of many countries.
We are pleased to have just released our annual research on the world’s largest economic entities, Corporate Clout 2013, which reveals that, in 2012, 40 of the world’s 100 largest economic entities (countries and corporations combined) are public corporations. This is the same percentage as in 2011 but down 2% since 2010 (42%). If you look at the top 150 economic entities in 2012, the proportion of corporations is 58%, slightly down from 2011 (58.7%) but at the same level as in 2010 (58%).
Due to the global recession and the upward economic growth trajectory of rapidly developing economies (RDEs) China overtook Japan to record the second largest GDP after the United States in 2010. However, since 2010 the top 5 economic entities have maintained their ranks with the U.S. as the largest, followed by China, Japan, Germany and France. In 2012 the United Kingdom once again overtook Brazil as the sixth largest nation in terms of GDP, while Russia moved ahead of Italy to claim eighth place. Iran, Venezuela, Nigeria, Egypt and the Philippines also improved their economic positions relative to the majority of developed nations.
Dipping into the numbers for corporations Wal-Mart has, since we started our analysis in 2009, consistently been the largest corporate economic entity in the world. However, in 2012, Wal-Mart was overtaken by both Royal Dutch Shell (largest) and Exxon (second largest) leaving it in third place. Royal Dutch Shell recorded 2012 revenues that exceeded the GDPs of 171 countries making it the 26th largest economic entity in the world. It ranks ahead of Argentina and Taiwan, despite employing only 90,000 people.
Looking at the industry picture, we found some mind-blowing numbers for 2012:
- The 5 largest energy majors are Royal Dutch Shell, ExxonMobil, BP, Sinopec and China National Petroleum (respectively). If you add the revenues of these five energy powerhouses, the combined total in 2012 is the equivalent of 2.9% of global GDP – a little more than the GDP of Russia, the eighth largest nation in the world in terms of GDP.
- The 5 largest automakers: Toyota Motor, Volkswagen, General Motor, Daimler and Ford (respectively) had revenues equivalent to 1.24% of total global GDP, which is more than the GDP of the Indonesia.
- The largest 5 financial services companies: ING Group, AXA, Fannie Mae, Allianz and BNP Paribas (respectively) had revenues equivalent to 0.97% of total global GDP, which is more than the GDP of Switzerland.
Between them these 15 corporate titans employed almost 5 million people in 2012, which is more than the entire population of Norway or of Ireland or of Malta, Qatar and Kuwait combined.
Altogether the 40 companies on our list in 2012 generated revenues of close to US$ 7.9 trillion, equivalent to just under 11% of the global GDP and up 1.4% despite the same number of companies on the list in 2011.[i] If all the companies in the top 100 list together constituted one country, it would be third on the top 100 economic entities list, behind the U.S. and China but ahead of Japan. However, their combined contribution to global employment falls far short of their economic clout. Together, they employed 12.8 million people in 2012, less than 0.4% of the world’s economically active population.[ii] Yet, this still exceeds the total population of Greece.
These numbers clearly show that corporate clout is alive and well. However, looking back to 2000, the figures suggest that economic power is becoming more distributed, with corporations’ share diminishing. The number of corporations among the world’s 100 largest economic entities has fallen 20% over the last 12 years, to 40 in 2012, from 50 in 2000. The question is what’s driving this change?
One reason is the clear movement of economic power from West to East as the economies of rapidly developing economies (RDEs) move up the ranks of global economic power – along with fast-growing companies headquartered in these regions. The long established multinationals, generally headquartered in and with a majority of revenues from slow-growing (if at all) developed economies, are having trouble keeping up with the RDEs much higher growth rates. Among the top 100 economic entities there are now 8 RDE companies versus just 1 in 2000, and looking at the top 150, the number of RDE companies more than triples between 2000 and 2012 to 17.
Where does your organization fit into the rankings? And why does it matter?
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