Two lists – the top 10 “thriving” and the top 10 “dying” industries — published in The Wall Street Journal, have caught some attention. The Santa Monica-based business information firm IBISWorld produced the lists, which rank industries by revenues and track growth or decline in the decade between 2000 and 2010.
In a web-driven world, it’s no surprise that VoIP (Voice over Internet Protocol) providers topped the list of “thriving” industries, which also features e-commerce and online auctions, along with Internet publishing and broadcasting. The study says VoIP providers grew combined revenues 194% to $12.5 billion between 2000 and 2010, and forecasts 17% growth through 2016. Other industries doing well include wind power, solar power and environmental consulting.
One surprise: “correctional facilities.” Explains the report: “Unfortunately, a growing population also increases the need for prison guards….” But Wharton management professor Lawrence G. Hrebiniak is stumped by that. “Are people getting into that much trouble, more than they’ve gotten into in the past?” he wonders. “Are we going to have more prisons and are more prison guards needed? I don’t think we need more prison guards.”
He also sees a glaring omission — banking. “Look at the investment banks with all the bailouts and frauds … and there has been no prosecution, virtually. In fact, banks can get away with anything. Talk about thriving.”
Oil and gas have also been thriving, including ExxonMobil and other oil majors. Mining, too, ought to be on that list, he argues, citing the looming shortages of uranium and rare earth minerals as examples, along with seemly endlessly rising gold prices. Some “vice” industries, also belong on the “thriving” list, such as tobacco and liquor, if the lists tracked global growth.
In any event, Hrebiniak thinks these lists are fun to toy around with, even if they don’t send investors on a frenzied rush to reshuffle their portfolios. If correctional facilities and prison guards are having boom times, he thinks there is good reason to include lawyers. “Where don’t lawyers now have their fingers in things?” Bankruptcy and foreclosure lawyers are thriving and lawyers are “making more money than they can shake a stick at.”
Hrebiniak isn’t so sure about environmental firms, solar power or wind power. “Is this just wishful thinking? Are they really thriving? People push wind power and solar power but nothing has really happened yet,” he says.
Hrebiniak doesn’t quarrel much with the Top 10 Dying Industries that Journal published in March. The list features wired telecommunications carriers; mills; newspaper publishing; apparel manufacturing; DVD, game & video rental; video postproduction services; record stores; and formal wear and costume rental.
Hrebiniak says one “industry” should be on both lists — politicians. “Politicians are hated,” he says, citing the travails of former California governor Arnold Schwarzenegger and the just-resigned International Monetary Fund chief and French presidential hopeful Dominique Strauss-Kahn. “You can consider it a dying industry — who wants to be a politician today?” On the other hand, politicians are thriving, too, he says. “They are making lots of money, they are beyond the law, they don’t have to make any changes in Washington, and they just keep on thriving.”