A few blogs back, on why Canada has so little entrepreneurial modern commerce, a regular reader, Brian, asked why I looked down the list of the top Canadian companies to position 24 before finding an entrepreneurial modern company.
Here is the reason. The presence of money creates those first 23 companies. The money and wealth are created by that 24th company.
The town serviced the people who lived there with banks, financial companies including insurance, media of all sorts, books, clothing stores, gas stations, every imaginable service for automobiles, there were utility companies and food supply companies. Much the same as I saw in Dakar, Senegal on the West coast of Africa. Those are the 23 top ranked business in Canada and most of the world.
The money in this commercial system is created by the companies that generate enough surplus to export. In the neighboring town, to my example in Iowa, is a company that makes, trucks and mobile homes. Another nearby town has a company that makes American flags and still another that produces cartoons for advertising. Those nearby exporting companies, along with all the farming in the area, produce the surplus that generates the money to support all the other locally focused businesses.
Dakar Senegal, in West Africa, generates money from growing and shipping fresh flowers to Europe. It used to sell slaves to the Atlantic trade. That export flower money supports all the standard local supply businesses.
A few entrepreneurial modern commercial companies create and sell surplus goods and services in excess of what the local market demands. That generates the money for the local market to buy from the many simple businesses that service the local markets. These simple businesses can become gigantic as they service multiple local markets.
Brian, does that explain why I don’t treat the first 23 of Canada’s largest as entrepreneurial modern commerce? Those 23 are really bureaucratic clusters of workers doing their jobs. Insofar as they are meritocratic, they do a good job and will survive, otherwise they are sustained by the absence of mistakes.