Must-Read: Laura Tyson and James Manyika: Putting Profits in Perspective

Must-Read: Laura Tyson and James Manyika: Putting Profits in Perspective: “Corporate profits may be near all-time highs…

but their variance among firms and industries has also increased significantly. The most profitable firms in the US are… in sectors that capitalize on research and development, brands, software, and algorithms. Companies in sectors like pharmaceuticals, media, finance, information technology, and business services have the highest profit margins… excluding finance, these sectors’ share of US corporate profits has increased significantly, from 25% in 1999 to 35% in 2013…. In the most digitally advanced sectors of the economy, margins have grown 2-3 times faster than average. And even within these sectors, there are enormous spreads between the top-performing companies and the rest of the pack. The ‘winner-take-most’ dynamic of the digital economy is not only producing record profits for leading firms; it may be accelerating the pace of innovation and broadening the areas in which companies can enter and quickly establish market power…