At a time when more Americans are living longer, the companies where many people spend their working lives have increasingly shorter lifespans, according to research from Indiana University’s Kelley School of Business.
A paper by two Kelley professors, forthcoming in the Academy of Management Annals, found that the odds of a company surviving more than five years has declined dramatically since the 1960s and that this trend also holds for firms lasting 10, 15 and 20 years.
Companies emerging as publicly listed firms in the 1960s had a 50-50 shot of making it to their 20-year anniversary. By the 1990s, that percentage fell to 20 percent. Similarly, such companies used to have an 80 percent chance of being around after 10 years, but those odds were down to 50 percent for firms established after 2000.
A news release with quotes from Rene Bakker, assistant professor of management and entrepreneurship, and Matthew Josefy, assistant professor of strategy and entrepreneurship, is available on the News at IU website.