Whatever happened to the plc?

Public companies have long been the engine of growth in the west, but now their numbers are dwindling as alternatives emerge. Simon Caulkin reports.

by Simon Caulkin

It's not just the natural world that is subject to climate change. Some believe we are on the brink of a similar epochal shift in the ecology of capitalism. The evidence: a sharp and unexpected decline in the global population of public listed companies, the powerhouse of western business for the past 150 years. Although the drop is worldwide, it is most startling in the US, the heartland of stock-exchange capitalism, where public listings have plunged almost 50% since 1997's high of 9,253, and the UK. Asian listings have suffered the smallest shrinkage of nearly 5%, while Europe has lost 23% of its quoted firms over the same period. Around the world, according to figures compiled by Jason Voss of investment analysts the CFA Institute, the number of global equity listings stood at 46,674 at the end of 2012, having peaked at 56,119 in 1998.

For some economies, this may be the market equivalent of the extinction of the dinosaurs or the melting of the polar icecap. Since the mid-1800s, at least in Anglophone countries, the plc-stock market double act has been the busy flywheel of material advance; the former channelling entrepreneurial exuberance and technological knowhow into commercial opportunity, the latter risk capital and subsequent returns to investors.

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