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How did a peddler of cheap shirts and fishing rods become the mightiest corporation in America?The short version of Wal-Mart’s rise to glory goes something like this:In 1979 it racked up a billion dollars in sales. By 1993 it did that much business in a week;by 2001 it could do it in a day.
It’s a stunning tale - one that propelled Wal-Mart from rural Arkansas, where it was founded in 1962,to the top of the Fortune 500 this year. Sam Walton, Wal-Mart’s founder,pushed sales growth relentlessly while squeezing costs with sophisticated information technology.He exhorted employees to sell better with the“ten foot rule” (greet customers if they are that close).He was, in other words, an early evangelist forthe first commandment of today’s economy: Service rules.Wal-Mart, in fact, is the first service company to rise to the top of the Fortune 500.When Fortune first published its list of the largest companies in America in 1955, Wal-Mart didn’t even exist.That year General Motors was America’s biggest company, and in every year that followed, either GM or another mighty industrial, Exxon, was NO. 1.
Wal-Mart’s achievement caps a bigger economic shift - from producing goods to providing services.Manufacturing’s share of U.S. employment peaked in 1953, at 35%.It has been declining steadily since. In the decade that will end in 2010,the Bureau of Labor Statistics figures that goods producing industries will create 1.3 million new jobs,compared to 20 million for service industries.To look at it another way, today there are about four times as many people working in service jobs as in other kinds of jobs.And even within manufacturing, services are an increasingly large share of operations.
As America got richer consumption got more complicated. With more income to throw around,people started spending more on services movies and travel, mortgages to buy houses, insurance to protect those houses,the occasional decadent weekend at a luxury hotel.Economists call this a shift in the demand pattern;Fortune calls it the main reason that 64 of this year’s top 100 are service companies.Over the next few years, only three of the ten fastest growing occupations (software engineers, nurses,and computer support) pay middle class salaries.The rest could be called, well, Wal-Mart kinds of jobs - cashiers, retail assistants, food service, and so on. In short, the service economy is delivering more good jobs than ever before.
