[00:06.22]054.A Knack of Wal-Mart’s Success [00:13.18]How did a peddler of cheap shirts and fishing rods become the mightiest corporation in America? [00:20.48]The short version of Wal-Mart’s rise to glory goes something like this: [00:26.32]In 1979 it racked up a billion dollars in sales. By 1993 it did that much business in a week; [00:36.48]by 2001 it could do it in a day. [00:41.24]It’s a stunning tale - one that propelled Wal-Mart from rural Arkansas, where it was founded in 1962, [00:49.86]to the top of the Fortune 500 this year. Sam Walton, Wal-Mart’s founder, [00:55.64]pushed sales growth relentlessly while squeezing costs with sophisticated information technology. [01:03.94]He exhorted employees to sell better with the “ten foot rule” (greet customers if they are that close). [01:13.56]He was, in other words, an early evangelist for the first commandment of today’s economy: Service rules. [01:22.88]Wal-Mart, in fact, is the first service company to rise to the top of the Fortune 500. [01:29.55]When Fortune first published its list of the largest companies in America in 1955, Wal-Mart didn’t even exist. [01:38.83]That year General Motors was America’s biggest company, and in every year that followed, [01:45.37]either GM or another mighty industrial, Exxon, was NO. 1. [01:52.20]Wal-Mart’s achievement caps a bigger economic shift - from producing goods to providing services. [02:00.41]Manufacturing’s share of U.S. employment peaked in 1953, at 35%. [02:07.69]It has been declining steadily since. In the decade that will end in 2010, [02:14.81]the Bureau of Labor Statistics figures that goods producing industries will create 1.3 million new jobs, [02:23.76]compared to 20 million for service industries. [02:28.22]To look at it another way, today there are about four times [02:33.02]as many people working in service jobs as in other kinds of jobs. [02:37.48]And even within manufacturing, services are an increasingly large share of operations. [02:45.95]As America got richer consumption got more complicated. With more income to throw around, [02:52.76]people started spending more on services - movies and travel, mortgages to buy houses, [02:59.46]insurance to protect those houses, [03:02.59]the occasional decadent weekend at a luxury hotel.Economists call this a shift in the demand pattern; [03:11.42]Fortune calls it the main reason that 64 of this year’s top 100 are service companies. [03:19.18]Over the next few years, only three of the ten fastest growing occupations (software engineers, nurses, [03:27.87]and computer support) pay middle class salaries. [03:32.62]The rest could be called, well, Wal-Mart kinds of jobs - cashiers, retail assistants, [03:40.58]food service, and so on. In short, the service economy is delivering more good jobs than ever before.

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