FORTUNE 500? He Practically Invented It
Alfred Chandler, professor emeritus, Harvard Business School
By Geoffrey Colvin, FORTUNE senior editor-at-large

(FORTUNE Magazine) - If you want long-term perspective on the FORTUNE 500, there's really only one person to ask. Alfred Chandler, 87, is America's preeminent business historian, having devoted decades to the study of big business in particular.

He's still at it: Last year he co-edited a collection called "Leviathans: Multinational Corporations and the New Global History." FORTUNE's Geoffrey Colvin spoke with him recently about the future of the FORTUNE 500, important trends that haven't changed since the 1880s, and why he doesn't foresee China dominating the global economy.

The companies at the top of the 500--Exxon Mobil (Research), Wal-Mart (Research), General Motors (Research), Ford (Research)--are all taking a beating in public opinion. Does America hate big business more than it used to?

I don't think so. Think of the reputation of big business in the Great Depression and the situation with F.D.R., whom businessmen hated. That was much different from now.

What's the most important difference between U.S. big business today and when you began studying it over 50 years ago?

The most important difference--and this has been happening since the 1880s--is the continuing transformation of big business by high-technology firms. When a new science appears, they commercialize it globally. In the 1880s the new technologies were electricity and steam. The Germans commercialized them first. Pretty soon you could telegraph China and ship your products to the Chinese dye industry. Today it's biotech.

Some people worry that China will achieve economic dominance as a result of all the engineers and scientists it's graduating.

If you don't have a world market, what difference does it make? The Chinese today are not operating in world markets, and everyone else is. They have a huge home market, so maybe they feel they don't need to. What have they done? They were going to buy one U.S. oil company last year. This is very different from setting up a whole set of operations around the world, as the Japanese did so beautifully after World War II. I don't see a challenge there.

Are the FORTUNE 500 companies going to be where the best young people will want to work in the future?

Those companies will be a very fine place for young people to work, especially where you have high technology. Again, a good example is biotech--you have an integrated learning base, you have scope and companies coming up with a lot of new stuff.

What's the future of the FORTUNE 500?

It's bright as long as new sciences appear. Once you can commercialize new technology, you've got every advantage. Top of page