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Thursday, June 24, 2021

How Companies Impact Households

 Quite a considerable piece here from McKinsey, with lots of graphics

A new look at how corporations impact the economy and households

May 31, 2021 | Discussion Paper  (84 pages) 

By James Manyika, Michael Birshan, Sven Smit, Jonathan Woetzel, Kevin Russell, and Lindsay Purcell

A new look at how corporations impact the economy and households

We map the different ways in which the economic value that large companies create flows to households in OECD economies and examine what has changed in the past quarter-century.

The role of companies in the economy and their responsibilities to stakeholders and society at large has become a major topic of debate. Yet there is little clarity or consensus about how the business activity of companies impacts the economy and society. In this discussion paper, the first in a series, we assess how the economic value that companies create flows to households in the 37 OECD countries, and how these flows have shifted over the past 25 years. We identify patterns in what different types of companies do and how they do it, and how the mix of these companies and their patterns of economic impact have changed.

At its core are two analyses: The first maps all the pathways through which a dollar of company revenue reaches households—not just traditional measures of labor and capital income but also less-discussed aspects such as consumer surplus and supplier payments. The second is an algorithmic clustering of companies into eight “archetypes,” based on what they do and their impacts on society. This clustering transcends traditional sectoral views and highlights the similarities and differences between companies in how they affect households. For both analyses, we seek to understand the situation today and how it has changed over the past 25 years.  .... '

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