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Economic Decentralization & the Growth of the Small Business

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Presented by SNCR Founding Fellow Steve King, Emergent Research, a SNCR Research Partner

Presented by SNCR Founding Fellow Steve King, Emergent Research, a SNCR Research Partner

(2008)

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Economic Decentralization & the Growth of the Small Business Economic Decentralization & the Growth of the Small Business Presentation Transcript

  • The New Artisan EconomyEconomic Decentralization and the Growth of Small Business Steve King SNCR Fellow and Board Member Partner, Emergent Research Emergent Research www.emergentresearch.com
  • Emergent Research•  Our focus is the global intersections of: –  social and demographic shifts –  technology –  marketing –  economic decentralization•  Ongoing collaboration with Intuit on the Future of Small Business project•  Our project blog is www.smallbizlabs.com•  Project reports and resources: www.intuit.com/futureofsmallbusiness www.emergentresearch.com
  • •  Web 2.0 and social media platforms are changing how we learn, share knowledge and innovate; how we behave both as consumers and producers; and ultimately, how we organize our economic lives.•  SNCR Center for the New Economy - new research center focused on the Web 2.0-enabled economy•  Inspired by shifts in business and economic behavior resulting from new communications technologies•  CNE will explore, research and analyze the growing impact of social media and connective technologies on business and the economy•  Focus on achieving insights and a better understanding the new, social media-driven economy www.emergentresearch.com
  • The Entrepreneurial Economy is Here•  US Small businesses: –  Employ over half of America’s private workforce. –  Generate over half of America’s non-farm GDP –  Create 60-80% of America’s net new jobs –  Extremely diverse in size, style and goals•  Small business is booming across the globe –  Similar statistics for Europe and Japan –  Developing world encouraging small business www.emergentresearch.com
  • 27 Million U.S. Small Businesses (2007) About 25% of U.S. Large Enterprise Households Are Close to $10 Also Small Mid Trillion in Businesses Market Revenues Small BusinessSources: Intuit Main Street Quant Survey 2006, Intuit Small and Simple Segmentation Survey Jan 2006, Intuit Mid Market Quant Survey 2006, US Census data2006, Emergent Research estimates www.emergentresearch.com
  • 23 Million Personal and Micro U.S. Small Businesses Average# of Firms Revenues Large Enterprise 50K Mid 630K $6.1M Market 3.3M $1.2M Main Street 23M $65K Micro & PersonalSources: Intuit Main Street Quant Survey 2006, Intuit Small and Simple Segmentation Survey Jan 2006, Intuit Mid Market Quant Survey 2006, US Census data2006, Emergent Research 2007 estimates www.emergentresearch.com
  • How did We Get Here?The Long Term Drivers of Global Economic Decentralization •  The Growth of Market Capitalism •  Deregulation •  Technology •  Globalization •  Social and Demographic Change www.emergentresearch.com
  • The Next Decade The New Artisan Economy Forecast•  Over 40 million U.S. small business by 2017•  Roughly 32 million personal businesses•  Over 10% of Americans self employed•  Most new artisans will be knowledge workers, but many will make things•  The long term drivers will continue their impact www.emergentresearch.com
  • Technology Drives Small Business GrowthAmplifies small and personal businesses •  Online access •  Networks •  Broadband •  Mobile Computing •  Social Software •  Analytics •  Virtual Worlds www.emergentresearch.com
  • Technology Reduces Cost and Complexity; Increases Power•  Applications cheaper and easier•  Small business process automation just beginning•  Find, filter and turn data into information•  Cloud computing www.emergentresearch.com
  • Technology Powers New Artisan Marketing•  Online presence•  Global reach and findability•  Niche enablement•  Successful small businesses are embracing online marketing and social media www.emergentresearch.com
  • Business Infrastructures Increasingly Lightweight•  Business infrastructure costs falling•  Plug and play infrastructure expanding•  Costs shifting from fixed to variable•  Capital costs and risks reduced•  Niche opportunities growMy Beating Heart www.emergentresearch.com
  • Lightweight Infrastructures & Shift to Variable Costs Allow Niche Producers to Compete Variable Cost Model Wins $ Fixed Cost Model Wins Fixed Cost ModelVariable Cost Niche Mass Model Markets Markets Units www.emergentresearch.com
  • Demographics Drive Small Business Growth Baby Boomers Small Business Formation by Age•  Lack of corporate jobs 27%•  Shifting social contract More likely•  Work/life balance•  Skills and Ability•  Want to work in retirement Avg 45-54 55-64 65+ 2006 Workforce Participation Rate By Age % 55-59 60-64 65-69 70+Sources: Kauffman Foundation, US Census www.emergentresearch.com
  • Demographics Drive Small Business Growth Women•  Lack of Corporate Jobs Women with Children in the Workforce•  Economics•  Glass Ceiling•  Lifestyle•  Mompreneurs•  Values 1975 2006 US Census www.emergentresearch.com
  • Demographics Drive Small Business Growth Generation Y Percentage of Teens•  Digital natives Who Want to Work For:•  Don’t trust corporations•  Values oriented•  Growing up faster and slower % Someone Themselves Else Gallup Poll www.emergentresearch.com
  • Demographics Drive Small Business Growth Immigrant Entrepreneurs Foreign Born as a % Of US Population•  Don’t have access to corporate jobs•  Entrepreneurial attitude•  Linkages to home markets and goods US State Department 1960 70 80 90 2000 2006 US Census www.emergentresearch.com
  • Industrial Structure Corporate Giants and Small Businesses•  Global giants continue to grow•  Small business sector expands•  Fewer mid-sized firms•  Elephants and mice dance together www.emergentresearch.com
  • Case Study: US Beer Market US Beer Brand Market Shares (2007) Bud Light 15.4% Miller High Life 1.9% Craft Brewers 1420 = 5.9% Brands www.emergentresearch.com
  • Case Study: US Beer Market US Company Market Shares 2007 www.emergentresearch.com
  • The Impact of the Recession on Economic Decentralization•  Long term drivers will continue to drive economic decentralization•  Small business formation rates increase in economic downturns•  Small business failure rates increase•  Small business spending and employment relatively stable www.emergentresearch.com
  • Questions and Discussion www.emergentresearch.com