Wednesday, February 14, 2018
This Tells You a Lot About Today's Economy
Washington-based Amazon has displaced Washington-based Microsoft to become the world's third largest company (by market valuation).
Here are the current standings;
1. Apple - $849 billion
2. Google - $746 billion
3. Amazon - $ 702 billion
4. Microsoft - $699 billion
5. Facebook - $521 billion.
Boeing, which chose to leave Washington for Chicago, comes in at a paltry $205 billion.
By contrast, Canada's top 3 are banks: RBC, TD and Bank of Nova Scotia, at $113, $102 and $74 billion (Canadian) respectively. Pretty small potatoes and not an innovator or tech giant among them. Hewers of wood, drawers of water and bank tellers. Great.
The other thing worth noting is that Amazon and Microsoft are Washington state companies. Apple, Google and Facebook are based on California. It's all west coast. All of it. The five biggest companies, not just in the U.S., in the world.
While Amazon and Microsoft combined tally $1.4 trillion USD in value, all other public companies in Washington state account for just $400 billion in value.
That's a stunning list, Mound. Any thoughts about why all five are West Coast? None of them are east of the Cascades. They are all close enough to the Pacific Ocean to go surfing for an afternoon break. There is nothing staid about this at all. Traditional companies better wake up.
ReplyDeleteHi Mound,
ReplyDeletefirst off, many thanks for this blog. You point to a lot of great info that I would never find myself. Kudos!
Next, the thing I find striking with the list is how little the companies on this list actually produce. Only Apple actually makes "things". Microsoft is increasingly moving away from selling software to providing "Software as a Service" (SaaS), meaning that you don't even own the software you pay for and can lose it at any time they choose (think of when Kindle memory-holed copies of 1984) and you can lose the ability to stay with a current version to save money. Amazon is a distribution channel for companies who do make things. Google and Facebook just sell eyes to advertisers.
ReplyDeleteMy guess, Toby, is that when you're free of geographic considerations such as proximity to markets, raw materials, industrial base, etc., you're free to locate to regions that are the nicest to live in.
Pretty much every British Columbian knows that's the west coast. Why would you want to locate to places where the air is foul and it's insufferably hot in the summer and unbearably cold in the winter?
There's that one inescapable fact. Victoria is the warmest city in Canada based on average, year round temperature. The hottest cities are east. The coldest cities are east. The most humid cities are east. The cities with the foulest air are east. They can't compete.
ReplyDeleteAnon, thank you for the kind words. Those stats really do reveal the measure of hollowing out of the industrial sector of the American economy. The good side, however, is that the creativity sector thrives - for now. Yet that's the end result of a lot of preliminary development that's now well underway elsewhere, notably China.
If the world is able to maintain a sufficient level of economic, political and environmental stability for the next two decades, it's not a reach to imagine America's current world-beating tech giants may have lost much of their current edge to competitors abroad.