The original title on this chart was “Creative Destruction is Accelerating”, and that is what it shows, as large companies get edged out of the S&P 500 more and more frequently. I chose a title for this post which reflects the positive side of this development – that new companies are breaking into the S&P 500 more and more frequently.
This excites me because a decent number of them will have been startups not so long ago. Numbers two and three in the list by market cap are now Apple and Microsoft, founded in 1976 and 1975 respectively. Other recent entrants to the list from the web space include Amazon, E-Trade, Ebay, Google, Salesforce.com, and Yahoo.
Turning to the UK, youngish tech companies in the FTSE 100 include ARM, Autonomy and Sage.
All of this is of course good news for entrepreneurs. One of the reasons I am in the venture business is my belief that the increasing pace of change is driving innovation out of large companies and into startups (which need funding). The declining longevity of large companies as evidenced by their life in top indices is an inevitable result of this development.
Thanks goes to my colleague Cedric Latessa for digging out this chart.