CONCEPT
Corporate Mortality Curve
The empirical finding — as regular as biological mortality — that half of all publicly traded companies disappear within ten years, following a curve mathematically indistinguishable from the death curve of organisms.
West's research, conducted with colleagues at the Santa Fe Institute using data on over 23,000 publicly traded American companies from 1950 through the early 2010s, reveals a regularity so clean it is almost eerie. The probability that a publicly traded company will die in a given year is roughly independent of its age and size. The survival curve — the fraction of companies surviving to a given age — declines in a pattern mathematically indistinguishable from the mortality curve of biological organisms. Half of all publicly traded companies are gone within approximately ten years. By thirty years, roughly ninety percent have disappeared — absorbed, acquired, bankrupt, or dissolved. The mortality rate has remained stable for over sixty years. It does not vary significantly between industries. It does not respond to business cycles in any lasting way. The mortality is structural, not circumstantial — a consequence of the hierarchical network topology that all mature corporations converge toward.
