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A few things Mark Wallace

Tag: economy

Will the Public Company Soon be a Thing of the Past?

The public company — at least in its current form — may be on the wane, according to economist Nancy Folbre. Folbre, who specializes in the interesting-sounding discipline of the economics of care, argues in The New York Times that “public corporations . . . are now waning in significance.”

Quantitatively, Folbre notes that there were twice as many public companies in the US in 1997 as there are today, an eye-opening statistic in itself.

She also cites a number of studies and trends, including the increasing concentration of public equity in the hands of investment funds, and the rise of private equity firms. This last makes it easier for companies to raise money outside the public stock markets, and is interesting to me in part because it matches up with financing trends I noted in an earlier post here.

Is the public company dead? Probably not. But sources of corporate financing are diversifying, and it’s likely that the landscape going forward will contain a larger proportion of privately financed companies competing on the same level with public companies. There are a lot of implications in this shift, but here are two I find interesting:

  • individual investors will need new ways to participate in the financing of private companies
  • regulatory regimes will likely need to be updated in order to provide some of the same protections to private investors as are enjoyed by public investors today, even if those protections take slightly different form

It will be interesting to see if the courts and agencies can solve the regulatory question in a way that retains some differentiation between the public and private equity markets, while at the same time broadening access to the private markets so that more people can participate. It’s possible that a third class of company will need to arise. I’ll save any speculations on that for a later post, but I’m interested to see what happens and hear what people think.

Exploring the Next Capitalism at South by Southwest

It’s pimping season for the South-by-Southwest Interactive festival, and of course I’m pimping a panel I’ve proposed:

How the Next Capitalism Can Meet Global Challenges” is the nifty-enough title that you still have a few days to vote for. Voting closes at the end of August. Read more about the panel — and vote! — at the link above, or here: http://panelpicker.sxsw.com/vote/3986

I’m planning the panel with an old friend, Eric Nonacs, who’s been working on sustainable economic and social development for many years, both in non-profits and the private sector, notably as an advisor to Bill Clinton at the Clinton Foundation and as an organizer of the annual Clinton Global Initiative conference in New York. The panel (if it gets accepted — that link again: http://panelpicker.sxsw.com/vote/3986 ) would be the culmination of a long-running conversation Eric and I have had about new approaches to business, the economy, and capitalism itself, and could be the start of an interesting project.

Essentially, we’re exploring business and economics from a point of view that’s neither Wall Street nor Occupy Wall Street, but which looks at how capitalism could evolve to meet the challenges we’re facing at the moment — challenges that current systems and practices are insufficient to tackling: things like climate change, income inequality, structural unemployment, and a host of others.

We’ve come to the conclusion that a careful examination of the economic and political landscape will reveal new approaches that can help make real progress toward solutions on issues like the above. But it will take an evolution in the systems we have now, rather than a revolution. It’s not that we have the answers, but we are interested in how we can help discover the future of business, define its tools and techniques, and disrupt a landscape that no longer serves the public, the country, or the world.

If you’re interested in a similar dialogue, please help us get our presentation on the South-by-Southwest schedule by voting for it at http://panelpicker.sxsw.com/vote/3986 before the end of August, and forwarding this email to anyone you think may be interested. Of course, the PanelPicker counts for only about 30% of the decisionmaking weight this year, so if you want to help by lobbying SXSW advisors or staff, please feel free!

Hope to see you in Austin.

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