Just recently, The Economist reported that in 1996 there were 7322 companies listed on the US bourses; a number which had fallen to only 3671 earlier this year. That's near enough to a clean halving of companies on those exchanges.

And that's in the world's premier capital market. If your business relies on listing fees, brokerage and assorted services, as the NYSE and NASDAQ does, that's a seriously unwelcome decline.

But the decline has some more important side effects for investors. And not just in the United States. Indeed, one of the biggest recent Australian IPOs wasn't on the ASX at all - the tech superstar Atlassian bypassed us altogether and listed directly on the NASDAQ exchange.

Part of the answer is the rise of private equity firms. Not only in number, but in ability to raise previously unimagined amounts of capital.

Put simply, companies - large and small - just don't need to go public in the same way they once did. And that can present a problem for investors.

Traditionally, small companies either get larger, go broke or get bought out. Which is fine, as long as the flow of new companies continues.

But when our brewers, our food companies, our miners and our financial services businesses are being bought out by bigger local and international rivals - and corporate raiders - without being replaced, that shrinks the pool of potential investments.

Lastly, think about the newest high-profile businesses. They are, by their very nature, winner-takes-most companies. Amazon doesn't leave much room for other online retailers. There aren't many other social networks after Facebook. The increasing concentration of market power within many industries makes it harder to compete - and leaves fewer options for investors.

Lest this be only a story of gloom, remember that the world's stockmarkets have become much, much bigger - in terms of the aggregate value of all listed companies - over the last 20 years.

So while the number of options available to us is receding, the opportunity to earn attractive returns hasn't taken a commensurate fall.

Foolish takeaway

But it does change the nature of investing to a degree, in two important ways. With fewer small companies, those with the time and inclination may need to work a little harder to find the real potential winners. Companies like Webjet, Integrated Research and Corporate Travel Management.

And if you don't have the resources or interest, find the large companies that are destined to become larger, because they're increasingly dominating growing industries. Locally, that might be Ramsay Healthcare and Cochlear and, increasingly, you'll need to look globally, to the likes of Google and Facebook. To the winners go the (increasingly globalised) spoils.

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Scott Phillips is the Motley Fool's director of research. You can follow Scott on Twitter @TMFScottP. The Motley Fool's purpose is to educate, amuse and enrich investors. ScottTheFool@gmail.com