After the Decline of Large U.S. Corporations: Where Do the New Giants Come from?

By Stephan Manning.

The latest Forbes 2000 Rankings leave no doubt: Large corporations continue to exist (and they grow even larger), but fewer than ever originate in the U.S. Among the Top 10 listed firms (in terms of sales, profits, assets, and market value) four are Chinese – including the first and second ranked Industrial and Commercial Bank of China (ICBC) and China Construction Bank. So is it really true that large corporations are collapsing, as Gerald Davis and Israel Drori suggest in their provocative article? Or are we simply witnessing the declining relevance of U.S.-based firms? Should we, in turn, just focus on the continuous power of Western multinationals in global production networks, as David Levy suggests in his related post, or is there another important dynamic: the gradual but certain shift of gravity from U.S., European and Japanese firms to new giants from BRIC countries – China, India, Russia and Brazil – and other emerging economies?

Let’s go back in time: In 2003, the top five ranked Forbes companies were based in the U.S. – Citigroup, GE, AIG, ExxonMobil, and Bank of America. Chinese or Indian firms were not even listed in the Top 10. Ten years later, a new order becomes apparent. While four U.S. firms remain in the Top 10 – JP Morgan, GE, ExxonMobil, and Berkshire Hathaway – firms from China increasingly populate the list. This shift seems even more dramatic when ranking firms by number of employees. While Wal-Mart continues to be the world’s largest employer with 2.2 million staff (2011), six (!) out of the Top 10 largest employers are Chinese (including oil, utilities and telecommunication firms), one is Taiwanese (Hon Hai Precision Industry), one is German (Volkswagen) and another one is American (U.S. Postal Service).

Clearly, firms from China and increasingly also India will soon dominate the global economic landscape. While the U.S. still tops the list of countries by GDP, it soon will be in a much less comforting sandwich position between China – which is forecast to surpass the U.S. in 2017 – and India in third place.

But the shift we are observing goes beyond that: foreign direct investments (FDI) coming from BRIC firms – in particular Chinese and Indian – are increasing year by year. This could be good news for the U.S. economy. One of the most important destinations of FDI is the United States (see also FDI report). In the near future, a large proportion of FDI in the U.S. will be contributed by developing country firms.

Let’s consider the example of global IT and business services – one of the most active industries in terms of FDI (see FDI Report). For over a decade, this industry has been dominated by both U.S. and India-based firms. While US-based IBM tops the list with $12 billion revenue coming from global services (2010), India-based Tata ($6.8 Billion), Infosys ($5.3 Billion) and Wipro ($4.7 Billion) follow right behind. As part of their global growth strategy, these emerging Indian giants have invested heavily in service delivery centers all around the globe, including Latin America and Africa (see recent blog post).

Their most important FDI destination however is the United States. All major Indian business service providers have set up centers in multiple U.S. cities in recent years. Some (e.g. Cognizant) have even moved their headquarters to the U.S. In 2012, the seven biggest India-based firms combined were employing 65,000 staff in the U.S.; the Tata Group alone accounted for 24,000 jobs, mostly in IT. But there is a flipside: A large proportion of “U.S. staff” are – often lower-cost – foreign-born nationals. In fact, Cognizant, Tata and Infosys are the top three recipients of H-1B visas in 2012. Cognizant alone successfully applied for 9,300 visas, followed by Tata (7,500) and Infosys (5,600), according to government information. However, the proportion of U.S. born employees at these firms has been increasing as well. Gradually, the preferences of U.S. science and engineering graduates are shifting from Google and Facebook to Infosys, Tata and the other new kids on the block. In addition to targeting talent from top U.S. schools, Indian providers have also increased their efforts in offering jobs at various skill and salary levels in regions heavily hit by the recession, such as Ohio, Louisiana and Michigan. Wipro also announced in 2012 to train and hire 400 American Iraq and Afghanistan veterans – in response to Obama’s call for support of returning military.

All this suggests that we are entering a new reality: (1) large corporations continue to exist, but they are increasingly based in emerging economies; (2) many of these new players have expanded globally, not least into the United States; (3) some have become important future employers for the next generation of tech professionals in the U.S. – both foreign and U.S.-born.

What are the implications of these trends? After an era dominated by large U.S. corporations providing employment and career opportunities in the U.S. (article by Davis and Drori), and an era of increasing expansion of these corporations into global production networks (article by Levy), we are witnessing the beginning of a new era of increasing global circulation of job and career opportunities from developing countries back into the U.S. and Western Europe. AnnaLee Saxenian once famously observed a shift from brain drain to brain circulation – describing the trend of young Indian or Taiwanese science and engineering graduates returning from Silicon Valley to India and Taiwan to start their own business, serving U.S. and global clients. Now we see Indian firms expanding into the U.S. competing with Google, Facebook and Accenture for technical talent – and succeeding so far in particular in attracting the lion’s share of H1-B visa sponsored foreign nationals.

Clearly, globalization has come full circle. Brain circulation is now being followed by global job and career circulation at all levels. In 2030, getting hired as a U.S. national by an Indian consulting or service firm, or by a Chinese bank or manufacturer with subsidiaries in the U.S., working in globally distributed teams among mostly Indian and Chinese co-workers will be considered normal.  But what – in this new reality – will salary models, career paths, and benefit programs look like? And how will fair pay and job security be defined? Neither local progressivism nor Fairtrade might be the answer, but emerging professional standards and knowledge exchange within transnational professional communities might become the center of attention in the near future.


Bracken, Chris: Top 10 Global BPO Companies by Revenue (October 10, 2011)

Business Today: “US senator introduces bill to check H1B visa fraud” (March 23, 2013)

CNN Money Global 500 (Number of Employees, 2011)

Financial Times FDI Report 2012

Forbes Global 2000 Rankings (April 2013)

Forbes Ranking (in 2003)

Helyar, John:  “Outsourcing Turns Inside-Out as Indians Open U.S. Centers” (Business Week, 10/25/2012)

Kaste, Martin:  “Who’s hiring H-1B Visa Workers? It’s not who you might think” (npr, 04/03/2013)

Rajan, Sujeet, & Ismail, Asif: “How the Tata Group, Infosys, Wipro & Essar are the biggest job creators in the US” (The Economic Times, IndiaTimes, 02/26/2012)

Saxenian, AL (2005): From Brain Drain to Brain Circulation: Transnational Communities and Regional Upgrading in India and China. Studies in Comparative International Development, 40 (2), 35-61.

UNCTAD (2012): World Investment Report. Geneva. (Chapter 1: Global Investment Trends)

Wikipedia List of Countries by Future GDP (Estimates)

Wikipedia List of Largest Employers

3 thoughts on “After the Decline of Large U.S. Corporations: Where Do the New Giants Come from?

  1. Pingback: Imagine your office building just collapsed… A plea for global safety standards | Activism, Resistance, and Change

  2. What Jerry is saying is certainly true, but nonetheless country of origin still matters I think. I am not surprised that, given their background as India-based service providers, Cognizant, Infosys and Tata absorbed most of the H-1B visa workers in the U.S. in 2012 rather than Microsoft and Google. Even though Cognizant is technically a U.S. company, it started in India and has not only maintained strong ties to India but also arguably brought labor practices from India to the U.S. Similarly, of course, those U.S. companies with a strong presence in India, such as IBM and Cisco, are already transforming work environments in the U.S. Apart from shifting workloads from the U.S. to India (and cutting jobs in the process), American Cisco engineers in the U.S. for example now increasingly work with Indian colleagues both locally and remotely. Being among a mixed domestic/foreign and globally distributed workforce will soon become a reality for many U.S. employees. And firm size and scalability of operations still matter – but globally rather than just within national boundaries. This has implications for future career opportunities, task assignments, salary negotiations etc. And maybe, at some point, country of origin will not matter much any more. But we are not quite there yet.

  3. Determining the nationality of corporations is tricky these days. The largest share of IBM’s employees are now in India, not the US; Accenture is incorporated in Ireland, having recently re-incorporated from Bermuda; and of course Hon Hai, a Taiwanese company, assembles most of Apple’s products in China. Sadly, many US-based corporations have stopped reporting on their employment levels in different countries, or separating full-time vs. part-time work, making it hard to get a good handle on these dynamics (

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