FP | At first glance, the story of
Accenture reads like the archetype of the American dream. One of the
world’s biggest consulting companies, which commands tens of billions of
dollars in annual revenues, was born in the 1950s as a small division
of accounting firm Arthur Andersen. Its first major project was advising
General Electric to install a computer at a Kentucky facility in order
to automate payment processing. Several decades of growth followed, and
by 1989, the division was successful enough to become its own
organization: Andersen Consulting.
Yet a deeper look at the business shows its ascent veering off the
American track. This wasn’t because it opened foreign offices in
Mexico, Japan, and other countries; international expansion is pro forma
for many U.S. companies. Rather, Andersen Consulting saw benefits—fewer
taxes, cheaper labor, less onerous regulations — beyond borders and
restructured internally to take advantage of them. By 2001, when it went
public after adopting the name Accenture, it had morphed into a network
of franchises loosely coordinated out of a Swiss holding company. It
incorporated in Bermuda and stayed there until 2009, when it redomiciled
in Ireland, another low-tax jurisdiction.
Today, Accenture’s roughly
373,000 employees are scattered across more than 200 cities in 55
countries. Consultants parachute into locations for commissioned work
but often report to offices in regional hubs, such as Prague and Dubai,
with lower tax rates. To avoid pesky residency status, the human
resources department ensures that employees don’t spend too much time at
their project sites.
Welcome to the age of metanationals: companies that, like
Accenture, are effectively stateless. When business and strategy experts
Yves Doz, José Santos, and Peter Williamson coined the term in a 2001
book, metanationals were an emerging phenomenon, a divergence from the
tradition of corporations taking pride in their national roots. (In the
1950s, General Motors President Charles Wilson famously said, “What was
good for our country was good for General Motors, and vice versa.”)
Today, the severing of state lifelines has become business as usual.
ExxonMobil, Unilever, BlackRock, HSBC, DHL, Visa—these companies
all choose locations for personnel, factories, executive suites, or bank
accounts based on where regulations are friendly, resources abundant,
and connectivity seamless. Clever metanationals often have legal
domicile in one country, corporate management in another, financial
assets in a third, and administrative staff spread over several more.
Some of the largest American-born firms — GE, IBM, Microsoft, to name a
few — collectively are holding trillions of dollars tax-free offshore by
having revenues from overseas markets paid to holding companies
incorporated in Switzerland, Luxembourg, the Cayman Islands, or
Singapore. In a nice illustration of the tension this trend creates with
policymakers, some observers have dubbed the money “stateless income,”
while U.S. President Barack Obama has called the companies hoarding it
America’s “corporate deserters.”
It isn’t surprising, of course, when companies find new ways to
act in their own interest; it’s surprising when they don’t. The rise of
metanationals, however, isn’t just about new ways of making money. It
also unsettles the definition of “global superpower.”
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