|| The history of how companies came to be formed ||
There are more than 200 million companies in the world today. The number keeps changing as new companies get registered each day and some get shut down. Have you ever wondered how it all started?
The Ancient Companies
Organizations existed as early as 8th century BC in India. Companies that time were called ‘Shreni’. These could exist as independent entities, much like today, enter into deals or own property. They could sue or get sued.
It is interesting to note that the concept of common money or currency was not around until the 6th century BC. So if you were a farmer reaping paddy in the 8th century, you trade paddy for household essentials like clay pots and cotton cloth with the potter and the weaver.
The Oldest Company Still Operating
In 578 AD, the Kongo Gumi company was established in Osaka, Japan. This was a construction company founded by an immigrant, who was commissioned to build the Shitenno-ji Buddhist temple by Prince Shotuku. Kongo Gumi was a family run business specializing in building Buddhist temples, which was in continuous operation for more than 1400 years.
They struggled financially in 2006 and became a subsidiary of Takamatsu. It still specializes in building Buddhist temples, even today.
The Oldest Operating Hotel
There is something about Japan and their resilience when it comes to businesses. The second oldest business to exist is Nishiyama Onsen Keiunkan, a hot spring hotel in Hayakawa, Japan.
It is recognized by the Guiness Book of World Records as the oldest and longest running hotel in the world. This hotel, located in the Akaishi mountains, has 37 rooms and gets its hot water from the nearby Hakuho springs.
This hotel has managed to weather and survive for the last 1300 years and stands as a proud 4 star hotel today.
Paper Currency and Modern Capitalism
In 960 AD, the Chinese saw a flurry of activity with the invention of gunpowder and the printing press. The printing press enabled the first paper money. Partnership form of business was made possible too.
But the first instance of the modern corporation was born with the East India Company, which was set up the British merchant adventurers and granted the Royal Charter of Queen Elizabeth I in 1600. Partners combined their personal stock, turning it into company stock to create the world’s first commercial corporation.
Industrial Revolution to Now
The Industrial Revolution in the early 1800s revolutionalized the way work is done through division of labour. If you owned a pottery business in 19th century, you need not mix, dry, shape, paint and sell all by yourself, like you needed to have done in your 8th century business. Each person could just do the work assigned to them. Manufacturing capabilities grew manifold.
In the 1950s, management jobs first came into the picture.
In 2020, there were estimated to be 213.65 million companies in the world. There are more than 41,000 listed companies with a collective market cap of more than $80 trillion.
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