Will Most of Us be Working for Giant Enterprises by 2028?

Abstract

Various economic theories yield quite opposite predictions about the changing size of enterprises and establishments. This essay explores trends in the size distribution of productive units for a period of more than three decades, showing according to most measurements that both types of units show a decline at least since the early 1980s, contrary to conventional expectations. The rising number of establishments per enterprise has also leveled off in recent years. Even while the share of the labor force in foreign branches of the largest enterprises has been rising, the absolute size of these enterprises has been declining. For the world as a whole, however, enterprise size has been dramatically increasing and the difference in trends in the U.S. and other industrial nations remains a puzzle.