The Small Business Outlook for 2020
The social, economic and technical landscape is rapidly changing and businesses must be prepared for these key changes. However, planning for the next financial year can be a daunting prospect and, without a crystal ball, how can any business owner prepare themselves for the next decade? To help businesses gain a better understanding of the future environment, the new Intuit 2020 report (PDF), provides an analysis of the shape of things to come. Some of the key changes that small business will face are outlined below.
1. Demographic Changes
The world faces a rapidly aging population. By 2020, one in five Europeans will be 65 or older. This will have a significant impact on the way we work. The majority of ageing baby boomers will work beyond the traditional retirement age, and many will start small businesses both for financial support and lifestyle. The younger baby boomers, aged 55 to 65, will start more small businesses than any other demographic.
The Digital Generation – also known as Gen Y – born between 1980 and 2000, will grow up, with the oldest turning 40 in 2020.They will be tech savvy early adopters of new technology with a focus on careers, families, home ownership and high-tech living. Their expertise in this field will see them build a growing number of global small businesses using mobile platforms.
Furthermore, women around the world will enter the workforce at an unprecedented rate. On a global scale, 870 million women who have not previously participated in the mainstream economy will gain employment or start their own businesses. Because of urban migration, increased access to education, mobile technologies, micro-credit and low market entry costs, women will create work and start businesses more readily than ever.
2. Technological Evolution
The past few years have seen some phenomenal changes in technology, from the rise of the smartphone, to the adoption of social networking and the launch of the “cloud”. This technological evolution will continue to escalate and cause significant changes to small businesses. Computing power will increase as costs go down and businesses will deploy these technologies to increase productivity and create innovative, collaborative networks among employees, business partners and customers.
The brick-and-mortar office will become a thing of the past as the way people work and do business alters due to the emerging Internet cloud and mobile technologies. Working in the cloud will cause a move away from corporate offices altogether and toward an in-my-own-place, on-my-own-time work style. This will be spurred on by enhanced collaboration and video services which will transform the workplace to one where distributed, virtual teams meet regularly using these new technologies.
Furthermore, smart phones, tablets and other mobile computing devices will become the go-to computing devices for most of the world. In addition, “third places” for work such as public libraries, co-working facilities and rent-by-the-hour office suites will join the traditional office and home.
3. How will Small Businesses Change?
Small businesses will grow in importance and flourish due to both their agility and demand for niche products and services. The global economy will see the diminished presence of mid-sized businesses as they are acquired and consolidated into large corporations.
The cost of starting and running a small business will continue to decline as smaller, lighter and smarter systems, components and manufacturing methods emerge. Small businesses will also shift from fixed-cost to variable-cost business models, adopting a pay-as-you-go approach to minimise both the investment risk and the upfront cash requirements of their business.
Today, roughly 25-30% of the U.S. workforce is contingent, and more than 80% of large corporations plan to substantially increase their use of a flexible workforce in coming years. Traditional employment will no longer be the norm, replaced by contingent workers such as freelancers and part-time workers. The long-term trend of hiring contingent workers will continue to accelerate with more than 80% of large corporations planning to substantially increase their use of a flexible workforce.
Intuit is a leading provider of business and financial management solutions for small organisations and their advisors including accountants and bookkeepers. Intuit works with British small businesses to understand the challenges that they face and find the solutions they need to be more successful. For more information, please visit: http://quickbooks.intuit.co.uk
All the Intuit 2020 research can be found at www.intuit.com/2020.