Thursday, August 8, 2013

Corporate extinctions

From Discover magazine, September 2013: 20 Things You Didn't Know About ... Failure, by Jonathon Keats
7. On average, 10 percent of U.S. companies go out of business annually.

8. And corporate extinctions follow a pattern: A low-level attrition rate is occasionally punctuated by many companies failing at once. The economist Paul Ormerod has found that the relationship between severity and frequency follows a power law -- mass failure is exponentially rarer than everyday attrition.

9. The pattern seems to be natural. Over the past half-billion years, the extinction of species has followed the same power law.

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