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The 2009 Inc. 5000: A Window on the American Economy

The third annual Inc. 5000 shows impressive increases in the number of firms devoted to health care—and in those that cater to government.
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Two years ago, Inc. launched an ambitious tenfold expansion of its venerable Inc. 500 list, which dates back to 1982. One big reason we did that was to get a better statistical picture of the overall economy. With the third edition of the Inc. 5000, we can really start to see the business and economic headlines reflected in the composition of the list.

The construction and manufacturing industries serve as a great example. Back in 2007, they were the number one and two industries on the Inc. 5000 with more than 500 companies each. Those industries slipped to number three and four last year, and to the fourth and fifth rank this year, each with less than 400 firms. Meanwhile IT services continues as the field that just keeps on growing, claiming the No. 1 spot for the second year in a row with 658 companies, up from 467 in 2007.

But perhaps most striking is the growth in government services firms on the list in the past year. Inc. puts a firm in the government services category if more than 90 percent or so of its business is with federal, state, or local governments, no matter what the company does. The number of government services firms on this year's list grew 87 percent from last year to 252, more than 5 percent of the list. It's worth keeping in mind that all the growth in this sector came during the Bush administration—we won't see any of the effects of President Barack Obama's policies until next year' list.

Health also saw a healthy increase of 58 percent over last year. Many of these firms, such as MeridianEMR, SRSsoft, CollaborateMD, and AmazingCharts.com have been improving health care cost and efficiency for years as they move doctor and hospital data to a digital environment.

Excluding computer hardware--which as the successor to previous years' computers and electronics industry, is now more narrowly defined--real estate saw the biggest contraction in the number of companies on the list, down 37 percent to just 47. However, the survivors are doing well, with real estate being the third-fastest growing category in terms of median revenue growth at 190 percent. Energy and government services retain the number one and two spots in revenue growth from last year.

This year's list is our biggest yet by a number of measures. Total revenue tops $214 billion, up 16 percent from last year. Median annual revenue has crept up to over $10 million, and for the first time the list's total employment count exceeds one million. But growth has slowed considerably. The median growth rate is down to 126 percent from last year's 147 percent.

Our top five metro areas are unchanged from last year: New York, Washington, Los Angeles, Atlanta and Chicago. As for metro areas robust enough to support their own Top Companies lists, it's goodbye San Jose, hello

We've spiffed up our profile pages this year in a number of ways. We've got a three-bar chart for each company that shows the company's three-year growth, the median growth for the companies in the same industry, and the growth for that industry in the U.S. economy at large, as reported by SageWorks, a company that specializes in the analysis of financial data from private companies that is itself an alumnus of the Inc. 500 and Inc. 5000. We've got a map that shows exactly where each company is headquartered, along with the locations of other Inc. 5000 companies in the vicinity. And we've got a 'Trophy Case', which shows the years the company previously made the list and the top lists it's made this year.

Again we've got a wealth of feature stories on this year's crop. Inc. 5000 editor Margaret Dodge's Green 2.0 tells the stories of companies that are growing by helping to improve the environment. Early on in the editing process, our staff noticed that a number of Inc. 5000 CEOs have boosted their company's profile by appearing on Oprah. Inc. 5000 editor M. David Hornbuckle explores the phenomenon in The Oprah Effect. Contributor Marie Robinson's Un Nuevo Dia looks into the growth of the Latino market and businesses catering to that demographic. Inc. Reporter Keaton Gray's Should Your Company Go Online-Only? features companies with online-only business models. There are also slideshows, quizzes, and more Inc. 5000 content to come over the next few weeks.

As always, our list has new companies doing battle with entrenched giants. You may not have heard of the LOUIEs, but they are the Oscars of the greeting card industry, and this year eco-friendly Compendium beat out American Greetings and Hallmark for Card of the Year. eLove is going up against the likes of eHarmony and Match.com in the online matchmaking business. The Royalty Network is competing with ASCAP and BMI in the business of collecting royalties for songwriters and music publishers.

Our food and beverage companies are always coming up with new twists on old themes. Mary's Gone Crackers and Enjoy Life Foods make snacks and breakfast foods that are friendly to vegans and those with food allergies. Nutiva and Living Harvest Foods make hemp-based food products. And Kim and Scott stuff their microwaveable Gourmet Pretzels with all kinds of delicious fillings, like Spinach Feta and Chocolate Crumb.

There are clothiers to satisfy every taste from conservative to edgy. And if you want clothing with pictures of food, we've got you covered. If the clothes you want are not for you but for one of your favorite furry friends, PetsUnited, purveyor of goods via dog.com, horse.com, and many similar websites, has everything you could possibly imagine.

Explore the list, and all historical Inc. 500 and Inc. 5000 lists, with our Advanced Search page. We're sure you'll be able to gain many insights about industry sectors or geographical areas that interest you and about business in America today.




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