Clash of the corporate titans

For a short but significant period of time on 10 August 2011, Apple Inc. was the world’s largest corporation by market capitalisation. Wresting the top spot from Exxon Mobil is no mean feat for a company that flirted with bankruptcy only 14 years ago. The ‘top spot’ in the global pecking order has become increasingly volatile this century, with no less than 14 changes in the last decade.

Recently there have been five main contenders for the top spot. This century opened with Microsoft in the lead, before being eclipsed by General Electric. GE kept the top spot for five years with the exception of a brief Microsoft renaissance between October 2002 and April 2003. Rising oil prices and the commodities boom would then see a decisive shift as Exxon Mobil vied with PetroChina for the top spot for the last half of the decade.

Although Exxon Mobil occupied number one position for most of this time, it was temporarily eclipsed by PetroChina’s stunning stockmarket debut in Shanghai. This saw PetroChina briefly valued at more than $1,000bn in November 2007 – the world’s first trillion dollar corporation.

The list was far more stable in the second half of the twentieth century. General Motors was by a considerable distance the world’s largest corporation by revenues for much of this period. Fortune 500’s list shows GM in the top spot from 1955 to 1980 (with the sole exception of Exxon’s strong performance in 1975), when it was replaced by Exxon.

Exxon and General Motors would continue to battle for the top spot throughout the 80s, with Exxon dominating until 1985 and GM in the lead in the second half of the decade. GM would remain the world’s leading corporation by revenue throughout the 1990s. The picture by market capitalisation then favoured the more profitable technology companies, with both General Electric and Microsoft leading.

Casting the net further back becomes more difficult. There are certainly some obvious big names that must have ranked as the most valuable economic concerns of their day. The earliest joint stock corporations became some of the world’s largest economic concerns, eclipsing even the size of their home markets and states.

The Dutch East India Company (Vereenigde Oost-Indische Compagnie or VOC) dominated the 17^th and much of the 18^th centuries, eclipsing its nearest rival, the English East India Company. VOC trade in Asia during this period equalled the rest of Europe combined.

British imperial expansion and success in India ensured that the VOC’s reign would end by the second half of the 18^th century. The VOC would eventually declare bankruptcy in 1799.  Its position was taken by the Honourable East India Company, a megacorporation with a quasi-executive and administrative function across the Indian sub-continent. This domination lasted until the company’s nationalisation and absorption into the British Empire after the catastrophic Indian Mutiny of 1857-58.

Just as surely as economic power shifted from the Dutch Republic to the British Empire at the end of the 18^th century it would begin its shift from the old world to the new at the end of the 19^th century. The history of USA’s corporate dominance begins with the railroads. In 1880 the Pennsylvania Railroad was the world’s largest economic concern, dominating transport in the burgeoning eastern seaboard and pushing out westwards. At one point its budget was larger than the US government’s.

US dominance continued with the age of tycoons and monopoly mergers – Carnegie Steel Company was subsumed in the United Steel Corporation (which was, on its creation, the first billion dollar corporation and by far the world’s largest). Standard Oil was so large that its constituent parts on break up would become Exxon, Mobil, Amoco, Chevron, Marathon Oil and Conoco – all vast concerns in their own right.

The brief spell at the top by PetroChina demonstrates the next shift in economic power, as Asia reasserts its central position in the world. The shift could, in reality, have already happened. Whilst ExxonMobil is the world’s largest company by market capitalisation it is eclipsed by the private, state-owned petrochemical behemoths in the oil producing countries. Valuations for Saudi Aramco extend to $7 trillion, whilst Rosneft, Gazprom, Sinopec and Petrobras must join it in any list of economic titans.