Report Gives New Trends on E-Commerce Evolution, Communication Changes

Article excerpt

A recent report from the U.S. Small Business Administration's Office of Advocacy titled The Third Millennium: Small Business and Entrepreneurship in the 21st Century provides new trends on the rapid evolution of e-commerce and changes in communications technologies. But many trend lines -- long-term demographic changes and gaps in working capital -- look much as they did in 1995.

The four themes originally explored in the 1995 document The Third Millennium: Small Business and Entrepreneurship in the 21st Century were revisited in the present edition:

* Theme 1: Rapid change will continue and a sense of impermanence will grow.

* Theme 2: Heterogeneity, diversity, and complexity will continue to be hallmarks of the small business sector.

* Theme 3: Small businesses will continue to face barriers to entry and inhibitors of growth.

* Theme 4: The small business and entrepreneurial sector will continue to be strong.

The Office of Advocacy recently conducted two focus groups to examine these very themes. One involved delegates from the 1995 White House Conference looking at today's small business environment and what the delegates expect will be the small business environment in the year 2010. A second focus group of futurists examined trends most likely to affect small business at the beginning of the new millennium.

These groups found the predictions of the 1995 Third Millennium report to have been largely valid, but noted that many technological advancements had occurred even more rapidly than anticipated. Rapid technological change was seen as having both positive effects and potentially negative repercussions. Small businesses may now compete more effectively, as technology allows them access to a larger audience and gives them some advantages even over larger corporations that may not be able to move quickly enough in the new fast-paced marketplace. The most worrisome issue, in the eyes of these focus group participants, is that many in the work force may not be prepared to make effective use of the new technologies at their disposal.

Theme 1

The American economy and society -- the setting for both large and small businesses -- are undergoing rapid and fundamental changes, expected to continue into the 21st century. The rapidity of change and its fundamental nature have engendered an essential sense of impermanence and time pressure. Such pressures have brought into question basic elements of how businesses, society, and the economy operate.

* Insight 1: Downsizing signals restructuring.

The downsizing phenomenon in manufacturing has spread to other large organizations in society, specifically, parts of government and the communications sector. Downsizing in larger corporations and the outsourcing of many functions previously performed internally offer new opportunities for small businesses. The "social contract" that many large firms and governmental units had with their employees --white collar, blue collar, and pink collar -- held that their loyalty, commitment, and diligence would be rewarded. They would receive opportunities for advancement, increased wages, and the security of career-long employment, buttressed by a full panoply of fringe benefits, including a pension.

As some employees of such national companies as NationsBank, U.S. Steel, IBM, AT&T, and even large local banks and public utilities have found, many of the promises in the implied social contract have been eroded in the corporate reorganizations and downsizings of the mid-1900s. Suddenly, the attractiveness of careers in large businesses has changed drastically in comparison with the rewards associated with entrepreneurship and working in the small business sector.

Self-employment, the starting place for many entrepreneurs, has increased rapidly over the last three decades, particularly in nonagricultural industries. …