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The bad news is, with inflation seemingly a lot stickier than everyone expected, the Fed is going to need to keep lifting interest rates. And that rate hike campaign may very well drag the economy into a recession.
The good news is, recession is what sparks innovation. According to Morgan Stanley, roughly half of Fortune 500 companies were founded in times of recession or economic crisis.
“Necessity is the mother of invention. This is why warfare and space exploration have routinely spawned radical new technologies which, over time, have become almost mundane in consumer mass market,” says the U.S. investment bank.
Here’s their compilation of companies created during periods of economic stress.
| Period | Companies |
| 1927-1933, -27% GDP | Advance Auto, CHS, Markel, First Energy, Century Link, Publix, American Airlines, Baxter, Allstate, United Airlines |
| 1937-1939, -18% GDP | T. Rowe Price, Caesers, Progressive, REI, Cumberland, Dillard’s, Owen Corning, Tractor Supply, Darden, Fannie Mae, HP |
| 1945, -12% GDP | JanPak, U-Haul, Mattel, Cantor Fitzgerald, Constellation, Kaiser Permanente |
| 1949, -2% GDP | Buckle, American Signature, True Value, Rollins, Robert Half, Hexcel, Dick’s Sporting Goods, Manpower, Pottery Barn, ADP |
| 1953, -3% GDP | Burger King, Autoliv, Sargento, Umpqua, Apache, Loews, Lennar |
| 1957-1958, -4% GDP | Hyatt, Anixter, O’Reilly Automotive, Trader Joe, Visa |
| 1969-1970, -3% GDP | Domino’s, Century 21, AMD, Gap, Sysco, Danaher, Humana, Freddie Mac, FedEx |
| 1973-1975, -3% GDP | Bain, Foot Locker, UnitedHealth, TD Ameritrade, Microsoft, Charles Schwab |
| 1972-1982, -2% GDP | WWE, AMC, Lam Research, DISH, Amgen, Molina, Activision Blizzard, MTV, E-Trade, EA, IQVIA, Adobe |
| 1999-2001, -1% GDP | Workfront, Medallia, Just Eat, MailChimp, Bloom, Vonage, Salesforce |
| 2007-2009, -5% GDP | ZenDesk, US Foods, Cloudera, AirBNB, Groupon, Slack, Square, Uber |
| Source: Morgan Stanley | |
