When we talk about large companies, so not SMEs, we often associate them with the term empires. However, on empires we have many more physical bits, archaeological findings, that allow us to know more about their longevity. Whereas for companies we mostly have these data from the 20th century onward. And unfortunately, only the larger ones are delved into.
While for companies, in Italy, we know that they have an average lifespan of 12.1 years, on empires, definitely more complex organizations, we know much more, as they are part of an area of knowledge investigated by various types of academics.
If we take the data from a big picture, from a 2016 overview by Eric Lee, we notice a decreasing trend for the life expectancy of empires, as a function of the millennium.
However, we have a temporal aggregation, on the millennium, which from the industrial revolution onward can make us lose sight of something important. If we try to take the lifespan of the new empires, no longer understood as those of the past but as hegemonic, that is, having economic, political and/or cultural power, we can say we find an average lifespan of about 50 years.
I bolded the years that differ from the data in the source image and/or wikipedia. You can call it historiographic opinion. Just as other sensibilities might discuss other years. For example, I disagree with identifying the U.S. as an empire from about 1700, because historically it carries weight beginning with World War I, but especially toward the end of World War II. This, according to me and others, ends in 2018 with Trump’s isolationism. Same for China: some might talk about empire following the meeting between Nixon and Mao, but internationally they only carry weight with entry into the World Trade Organization. For the USSR, the fantasy about “socialism in one country” ends with the territorial annexations of World War II.
Clearly changing sensibilities on these issues changes the average above, but I do not expect upheavals.
Going more specifically, we see a decreasing and accelerating trend, something that in statistics lingo can be indicated by means of a Weibull distribution with a shape parameter greater than 1. But just as there is no such thing as growth to infinity and it brings us to some kind of logistic equation, (used in ecology, economics and of course also in statistics to predict certain phenomena, etc.), there cannot be, in this context, a trend leading to 0, because there will surely exist a lower limit greater than 0, something that some of you have known in your calculus course with the term asymptote.
Interestingly, the average above turns out to be close to the Kondratiev wave interval, a special case of a logistic equation applied to macroeconomics.
If you also read the first linked article, you will notice that both publicly traded companies (18 years according to Mckinsey for American ones) and empires are lasting less and less, although in the former case we have less data as history.
Is there a common cause? Yes, technology, understood as constructive and destructive creativity, using a Shumpeterian term. Clearly the industrial age has accelerated and increased this force. As long as someone sees artificial intelligence as the latest innovation that will derail this force. On a personal note, I say that as long as Meta, which knows so much about us, on average fails to make truly effective targeted advertisements through its artificial intelligence, we can sleep soundly.
If you are interested in having an SME with exceptional longevity, verifiable even by newspapers, we can achieve this indirectly through that building technology that is also part of digital transformation: statistics or data science. Enterprise Statistics can become your statistical consultant, but only after making a preliminary fact-finding call of about 30 minutes.