Fortune 500, annual list published by Fortune magazine ranking 500 of the largest companies incorporated and operated in the United States. Using publicly available data, Fortune ranks public and private companies on the basis of their previous year’s annual revenue. This widely known ranking is used to compare the largest U.S. companies with each other and also serves as a benchmark to evaluate the vitality and evolution of the U.S. economy.
Founded in 1929, Fortune first published the Fortune 500 ranking (initially named Fortune Industrial 500) in 1955 under the leadership of editor Edgar P. Smith. The prestigious ranking, typically published every spring, helped Fortune establish itself as one of the most influential monthly business publications. In 1990 Fortune introduced the Fortune Global 500 ranking, which similarly tracks the world’s largest corporations on an annual basis. Initial editions of the Fortune 500 were limited to businesses in the industrial, manufacturing, and energy industries; however, in 1994 the Fortune 500 underwent a major change as it began to include service sector companies. This editorial change, reflecting the increasingly postindustrial character of the U.S. economy, had a significant impact on the ranking, with approximately half of the companies on the previous year’s list losing their spots.
Besides being a mark of prestige for the businesses included in its ranks, the Fortune 500 is often used as a benchmark to analyze the evolution of U.S. businesses and the country’s economy. In analyzing which companies are included or excluded from the Fortune 500, economists have observed, for instance, a diversification of the geographical distribution of headquarters of the largest U.S. companies, which since 1955 has shifted from a concentration in major metropolitan areas, such as New York City, to include such locations as Texas. The ranking and its underlying metrics also highlight the increasingly large share of the U.S. economy that is occupied by the biggest corporations. Whereas the total revenues of Fortune 500 companies represented 39 percent of the nominal U.S. gross domestic product (GDP) on the ranking’s first publication in 1955, this figure had grown to more than 73 percent by 2013. Likewise, the evolution of the ranking provides a window into the growing or declining importance of certain industries. The early rankings were dominated by the manufacturing industry as well as the oil and gas industries, with companies such as General Motors, the United States Steel Corporation, and Gulf Oil in the top 10. In the 1990s service companies such as Walmart and AT&T Corporation made their entrance to the list. Today’s list includes technology companies such as Amazon.com and Apple Inc.