It seems as though you can’t turn on the television or pick up a magazine without coming across a politician or pundit extolling the virtues of small business and the role it plays in the U.S. economy.
In fact, Forbes is currently on the lookout for some of these amazing “small giants.”
It’s easy to see why small business is such a popular topic of conversation. As of today there are about 30 million small businesses in the U.S., 6 million of which actually have employees. These businesses account for over 50% of total U.S. GDP and 75% of the net new jobs in the U.S.
It’s clearly a big deal, but I for one, think that this renewed focus on small business is only the beginning. There is strong evidence to suggest that we’re witnessing the beginning of a major social and economic shift. As a result, I’ve become convinced that while the 20th century was dominated by the Forbes 400, the 21st century belongs to the “Small Giants” of the Forbes 4 Million.
There are three key drivers of this shift:
1. Structural changes in the economy
We lost over 8 million jobs during the great recession, and the sad reality is that many of these jobs are never coming back. Dramatic advances in technology over the last ten years have displaced millions of people whose skills no longer matched their industry’s needs.
This leaves us with a pool of skilled, experienced individuals who are positioned to become “accidental entrepreneurs” by creating or joining small businesses out of necessity.
2. Increasing interest in niche products
Next, we have a dramatic increase in demand for niche products and services. The vast reach of the internet as a distribution channel and low-cost advertising through social media has made it possible to cater to the most obscure tastes, quickly and easily.
3. Ever decreasing barriers to entry
Traditional barriers to entry are almost non-existent because of the relentless advancement of technology. In the past, if you wanted to start a business the difficulties of incorporating, developing a storefront, and getting in front of customers was a herculean (and cost-prohibitive) task. Now, a motivated entrepreneur can get up and running in a matter of hours because of innovative technologies such as Etsy, Shopify, and even Amazon.
A Few Challenges Remain
Despite the rapid growth in the small business sector, there is still much work to be done to ensure that we foster continued development.
Working to include basic business education as part of school’s core curriculum can help prepare students for life in today’s modern economy. We also need to provide established business owners with educational resources to get them the information they need, when they need it, quickly and easily.
Next, we must encourage innovation and development in the field of small business technology to help entrepreneurs do more with less. Small business owners must be empowered to handle their sales, marketing, accounting, and finances with ease and understand how these functions interact. The Forbes 4 Million will be comprised of an educated workforce empowered by technology, working independently to create exceptional value.
Finally, we must change our cultural expectations, particularly in regards to careers. In the past, we’ve encouraged people to build lifelong careers at a single company in one particular field. Success was defined by simply meeting the expectations of bosses and keeping one’s head down in order to advance over time. In doing so we’ve fostered a tragic result—passive, mediocre employees could find career success (or complacency) simply by going through the motions. The economic realities of the new normal require a different approach.
The Future Belongs to the Small Giants
We know that the world is changing. The old assumptions of what we should expect in regards to our careers and how we define success have gone out the window. Whether we like it or not, we must all be entrepreneurs in our own careers now.
Fostering a culture of entrepreneurship across all demographics will reshape what success means. A focus on individual motivation, financial literacy and business acumen will become the new norm, ushering in a period of exciting economic development.
Yes, there are challenges that we will face along the way to this brave new economic world. But if we strive to rethink the our approach to education, continue to develop and adopt new technologies, and reaffirm our cultural commitment to the entrepreneurial spirit that makes America great, we can and will overcome those challenges.
The future belongs to America’s “Small Giants,”and I, for one, can’t wait.