Future of Small Business

It’s a wealth of ideas, a thorough analysis, really good brainstorming, and a valuable resource. Intuit has published part three of Small Biz Labs’ excellent series on the future of small business, titled “The Emerging Artisan Economy. ” The report and related materials are available at:  www.intuit.com/futureofsmallbusiness.

And dear reader, I apologize to you. Steve King of Small Biz Labs sent me advance notice of the study being released, so I have no excuse for not posting on it sooner. The truth is that I wanted to read it again, and give you more of its substance summarized. But then there was a weekend in Bend, guest teaching an MBA class, and getting ready to take off again, to New York tomorrow.

Steve’s summary mentions 3 broad trends that will impact small business for the next decade:

1. Brain Meets Brawn to Create Opportunities for Small Business:  The first trend is based on the concept of “barbell economics”, a term we credit McKinsey as coining.  It envisions a barbell structure for most industries, with a few giant corporations on one end, a relatively small number of mid-sized firms in the middle, and a large group of small businesses balancing the other end.  This structure will result in new opportunities for small businesses to flourish in niches left untouched by large corporations, and lead to more cooperation between large and small companies – particularly in the areas of sales, marketing and innovation.
2. Lightweight Infrastructure will lead to greatly lowered barriers to starting and operating a small business.  Not only will infrastructure costs (IT, manufacturing, distribution, etc.) continue to fall, increasing numbers of platform companies will provide small business access to world class business infrastructure on a “plug and play” basis, allowing small businesses to compete in almost all industries.The shift to lightweight infrastructure and plug and play access will reduce small business capital requirements, shift many small business costs from fixed to variable and reduce overall risk for small businesses.
3. Borderless business:  small business will drive the next wave of globalization.  The next decade will see small business involvement in cross border trade expand substantially due to lower hard and soft barriers, strong economic growth outside of the U.S. and the growing impact of the global Internet and related communications technologies.

The report series is a collaborative effort between Emergent Research (that’s Steve’s group, and Small Biz Labs is that group’s blog), Intuit and the Institute for the Future.

Steve followed up this week with an additional note about the importance of artisans, quoting the report:

“Like their medieval predecessors in pre-industrial Europe and Asia, these next-generation artisans will ply their trade outside the walls of big business, making a living with their craftsmanship and knowledge. But there also will be marked differences. In many cases, brains will replace brawn; software and technology will replace hard labor and raw materials. Yet in many respects, the result will be the same as it was centuries ago: artisans will craft not only their goods, but shape the economy with an effect reaching far beyond their neighborhoods, even their nations.”

And, perhaps most interesting to me personally, the idea of value-based business:

One piece that may not have come out as clearly in the report as we would have liked is the trend towards values-based work.  One message that we consistently hear in our research is that people want to work in a manner that reflects their life values.  The values mentioned the most are work/life balance, sustainable business practices, social responsibility and giving back to the broader community.  We also hear people talking about “meaningful work”, “working independently”, and the pride of using their knowledge and skills to accomplish something.

I’m still learning blogging, and I guess I’m a slow learner; I am promising myself not to do this again, holding up something interesting because I want to make more of it.  You should have had this on Feb. 13.