IT’S A FIRST GENERATION CORPORATE SOCIETY
first generation makes its way into the corporate workforce,
workers who have migrated from rural locations are often
forced to take low-paying jobs, given the skill and education
gap. In the pursuit of progress, first generation corporate
societies place emphasis upon education and the development
of skills that fulfill labor market needs. This in turn triggers a
rise in literacy rates and educational attainment.
4 - Improving Infrastructure and Connectivity
A corporatized society runs on reliable roads and rails, electricity,
and telecommunications, with the aim of infrastructure
development to connect trade and create a corridor for
commerce. During America’s first generation as a corporate
society, the railway and subsequent road infrastructure
started to connect cities that were once both challenging and
time-consuming to reach. Suddenly, trips that took weeks
of arduous travel were reduced to mere days. During China’s
first corporate generation, investment in rural roads grew by a
massive 51 percent annually (between 2001 and 2004).
5 - Increasing Energy Consumption
The above developments are fueled by changes in energy
sources. The shift away from reliance on wells and fire and
towards the creation of a functioning energy sector counts as
the final indicator of a society’s progress along the corporate
development journey. Energy use in corporatizing societies
increases far more rapidly than in developed nations.
These five indicators signal when a society began corporatizing
and, as a result, what generation it falls into. But there are
other revealing factors:
• Labor productivity measured by output per hour worked
• Growth of the middle class
• Number of bank accounts held by individuals
• Availability and mobility of capital
• Female participation and level of seniority in the workforce
• The creation of new industries to serve the home
• Worker safety as a growing concern
• The discovery or adoption of technologies
• Political and institutional systems that foster change
LESSONS FROM EXPERIENCE
It is practically impossible to account for the first generation
of corporate society without putting things in historical
perspective. In fact, there is a primary difference between
existing corporate societies and those in their first generation.
The former emerged during the era of industrialization, while
the latter have emerged only recently, bypassing the Industrial
Revolution route.
China is one such example. Having largely avoided the
industrialization experienced in Europe and America in the
34 Emerging Markets Business Summer 2016 • Issue No. 1
RURAL TO URBAN MIGRATION:
CHINA AND THE US
Prior to the Industrial Revolution, most Americans were reared
within largely isolated agricultural households in small towns
or villages that were linked to the external world by horsedrawn wagons. Then, between the end of the Civil War (1865)
and 1920, the population transformed from being 75% rural
to 50% urban—a transition that ushered in America’s first
generation corporate society.
Conversely, as recently as 1980, fewer than 20% of China’s
population lived in a city, giving the country a lower urbanization
rate than England and Wales had in 1800. However, in the three
decades that followed, the country witnessed an unprecedented
rural to urban shift, with 2011 marking the year when, for the
first time, more than half of China’s 1.34 billion people became
classified as urban. The development of China’s first generation
corporate society was an impetus for its economic rise.
19th century, privatization only began in the country around
three decades ago and state-owned enterprises still dominate
many industries. Consequently, most businesses find
themselves in the first corporate generation. The 20th century
stagnation of China and also India the world’s two largest
economies in 1850 highlights the difference in corporate
generations, especially when their journeys are viewed next to
that of the United States.
America possessed just seven chartered business corporations
at the time of its independence, with the first significant
American industrial corporation, the Boston Manufacturing
Company, established as late as 1813. Unfettered by restrictive
laws or limited resources, however, American business
corporations soon outstripped their European counterparts.
In less than a century, advanced corporate forms like
J.P. Morgan's U.S. Steel and John D. Rockefeller's Standard
Oil, dominated the productive heart of American industry.
Colgate, Dupont, General Electric, and Brooks Brothers are all
from America’s first corporate generation.
THE MESSAGE IS CLEAR: RATHER
THAN LOOKING TO WHAT LEADING
COMPANIES IN THE WEST ARE
DOING NOW, IT IS IMPORTANT
TO LEARN HOW THEY MOVED
THROUGH THE CORPORATE ERAS
IF YOU WANT TO SUCCEED IN THE
EMERGING MARKETS.
Companies grew larger in America than they had done at any
other time anywhere else on Earth. Such was their influence,
US firms went on to shape the global business landscape
throughout the 20th and into the 21st century so much so, that
businesses the world over still attempt to mimic their models
and practices. While serving the rare company well, in a world
of societies at different stages of corporate development,