The Next American Economy project brought together 30 experts from various disciplines to envision tomorrow’s economic and political challenges and develop today’s solutions. Their assignment: be bold, and leave the conventional wisdom — and their own opinions — behind. In today’s video, Brookings’ Robert Litan presents the evidence that incumbent firms will consume an increasingly large piece of the economic pie.
Robert Litan, Senior Fellow at the Brookings Institution, speculates that the benefits from new technology could be captured by incumbent firms in the short term, to the detriment of business dynamism. Supporting that speculation, he observes two present-day business trends: first, a rising share of national income is going to big incumbent firms; second, firms older than 15 years (incumbents) comprise an increasingly large share of businesses overall. In short, evidence suggests older firms are increasingly dominant in the economy.