The corporate structure has been one of the great developments of the industrial age and a significant driver of economic development for the past almost two centuries.
Limited liability, governance by plurality, and the separation of ownership and management were very productive innovations.
And matched with capital markets formed a perfect storm of economic growth and innovation.
These two powerful vectors along with the market mechanism of allowing supply and demand to equilibrate and determine price and quantity have been a boon to human kind and have lifted nine tenths of humanity out of abject poverty and a life that was, as Thomas Hobbes put it:
solitary, poor, nasty, brutish, and short
Startups, entrepreneurship, and venture capital have led to a second wave of accelerated innovation and economic growth. They are perfectly matched vehicles and systems for exploiting Moore’s and Metcalfe’s laws. Unicorns, companies with valuations of $1B+, have been able to be funded and nurtured without the need for capital formation in the traditional capital markets.
Corporate structure falls short in its disconnect to the wider world and to constituencies and stakeholders outside its immediate purview of shareholders, management, and employees. The corporate mandate to maximize profits disregards the impact on other stakeholders.
This is an unintended consequence of the unparalleled success of corporate governance and structure, aligned with capital formation in the capital markets.
Trickle down and multiplier effects of wealth generation are inadequate and disorganized for dealing with spreading benefits more widely and equitably.
B Corporations are attempting to address and redress the situation. Widely spread entrepreneurship may be the key. Certainly government regulation and organized labor is required to throttle back excess, redistribute wealth in the coming automation unemployment wave, and maintain guardrails for public safety.
Here is a slide deck that examines how far we have come in the past few hundred years.
This is not meant to gloss over the problems we have and the need for social safety nets, universal healthcare and some form of universal income. As Winston Churchill said:
Democracy is the worst form of government, except for all the others.
The same can be said for capitalism: its the worst form of economy except for all the others.
In both cases we will probably progress towards hybrid forms that take the best attributes and manage the excesses.
Business techniques that have been developed over centuries and startup ecosystems that have evolved rapidly over the past decades can now be employed and deployed with little concern for barriers to entry including capital, communications, product development and distribution. MVPs, growth hacking, and digital downloads.
Now business skills can be the engine of agency for everyone.
The best way to find fulfilling work is to create it.