"The concepts driving us today have been obsolete for the past 50 years," says Watts Wacker, resident futurist at SRI Consulting, a Westport, Connecticut, marketing and business consulting firm. "The concept of reengineering without renewing your vision only means you get more efficient at doing the wrong stuff. It's time for a complete reconnecting, reinventing and redefining of the fundamental role of business."
Wacker sees a transition into an entirely new era. "It's a culture in which intellectual property is going to be more important than materials," he explains.
Meanwhile, the economy itself is on the brink of a 200-year shift, says David Birch, founder of Cambridge, Massachusetts-based economic research firm Cognetics Inc. According to Birch, "[We have entered a] knowledge-based economy, as opposed to the industrial economy, which we entered around 1810, and the agricultural economy that we entered 200 years before that. In this shift, the things that matter are not railroads and harbors and boats and steel and coal and oil, but knowledge. And the smaller firm is much more competitive in a knowledge-based economy than in an industrial economy because the cost of producing knowledge is very low."
We are already seeing the signs of these transitions; by the year 2017, futurists predict we will see the fruition of life-changing trends. Medical technology may lead to a life span of 150 years; global cooperation may lead to American businesses not just exporting but emigrating to other countries; niche marketing may lead to each individual becoming his or her own small business.
It will be a totally different world, says Birch--and small businesses will have no small part in it. "The large companies are, for the most part, gradually dying, and the ones replacing them, the Gateway 2000s and the ASTs and the Dells, will never even come near the size of the IBMs and the Digitals before them," Birch observes. "We aren't creating any more Exxons. The maximum size for a company will be much smaller. And we'll see a constant wellspring of new seeds being sown and old plants dying."
"This is the beginning of the end of big," concurs Faith Popcorn, author of Clicking: 16 Trends to Future Fit Your Life, Your Work, and Your Business (HarperCollins). "Even big companies, to survive, must know how to behave `small.' "
The rise of entrepreneurial companies will strengthen the U.S. economy as a whole, believes Birch, who likens the effect to the runway at the Kennedy Space Center. "They originally built a concrete runway along which a big tractor transported the space vehicles to the launch pad," he explains. "But they only got the missiles a few feet out before they realized it wouldn't work. The runway couldn't adjust; the missiles started to sway back and forth and eventually would have fallen over. They had to tear out the concrete and put down a bed of pebbles instead. So the tractor goes along and crushes all the pebbles, but the system is very stable. That's what our economy is like. The concrete runway is like a collection of Fortune 500 companies, a system that caused the stock market crash in 1929 and the huge drop in the Dow in 1987. Building the economy on the backs of a whole series of [small] companies ensures those events [won't reoccur]. Small businesses are like millions of little pebbles, the collection of which is very stable."