ANSWER: | In the mid-1960s, gigantic companies were the norm. General Motors in the 1960s was so large that it earned as much as the 10 biggest companies in Great Britain, France, and West Germany combined. Lacking competition from Europe and Asia, U.S. companies enjoyed unrestricted growth.
The 1970s saw the beginning of three significant trends that would forever change the face of business: macroeconomic turmoil, international competition, and the technology revolution.
By the early 1980s, business was in terrible shape. The Fortune 500 saw a record 27 percent drop in profits. Large mills and factories were shutting down; manufacturing employment was declining; and yet, ironically, productivity remained the same or actually increased. New, smaller manufacturers were still generating jobs—and not only manufacturing jobs, but service jobs as well. This occurred because the smaller, more flexible, entrepreneurial manufacturers became more competitive by hiring subcontractors who could perform tasks such as bookkeeping and payroll more efficiently. These service firms developed to support the needs of the product sector, but they also inspired the creation of other service firms. The 1980s became known as the Decade of Entrepreneurship.
Responding to this entrepreneurial drive, big businesses began to restructure and reorganize for a new way of doing business. More than perhaps anything else, the 1990s were characterized as the Information Age. The commercial Internet emerged midway through the decade, and suddenly global competition and resources were more readily available than ever before. The Internet made entrepreneurship and the ability to compete alongside large established companies in the same markets a reality. Furthermore, with more and more jobs being shipped overseas, employees learned that job security was no longer a fact of life. U.S. companies quickly discovered that their competitiveness lay in the control of information and new ideas, and clearly the Internet was to play an important role in this new view of the world. The late 1990s brought the "dot com" bubble and the rush of the venture capital community to position itself for what appeared to be a new way of doing business. At the same time, the interest in non-Internet-related technology was waning as investors saw a much quicker return on their investment in the world of e-commerce. |
