Search For Tommorow

Experts predict the future of small business.

Magazine Contributor

May 1, 1997 12 min read

This story appears in the May 1997 issue of . Subscribe »

A world in which computers take up entire rooms; in which "cell" refers to elements in biology experiments, not phones; in which shag carpet and short-sleeved polyester dress shirts are proper office decorum--are we talking about some strange alien colony? No, just the United States of 1977.

While looking 20 years into the past can be amusing, looking 20 years into the future fills many
with trepidation. Indeed, the ungraspable, overwhelming nature of the future has a way of reducing even top futurists to putty, leading them to spout statements such as "The future hasn't happened yet," "The future will not be like the past," and "Things will be the same, but different."

"The most useful knowledge we can have is knowledge about the future," says Wendell Bell, professor emeritus of sociology at Yale University and a pioneer of the modern futurist industry. "To make our way in the world, [we] have to make some assumptions about what the future will be and how to adapt to it." With that in mind, we asked some of the nation's top futurists to share their predictions for tomorrow.

Small Business Lifts Off

"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."

No Time Like The Future

That small business will dominate the future seems a fairly firm prediction, but envisioning the environment in which they will reign is a little more complex. Major issues include the maturing of the global market, the shrinking pool of qualified workers, even the lengthening of life itself--significant considerations for entrepreneurs, who are notorious for their shortsightedness.

"I think most futurists would agree businesses [typically] concern themselves with a future that's too short-term," says Bell. "They don't take into account the long-term consequences."

To help you start preparing for the long term, here are some top futurists' predictions for the year 2017:

*Longer life spans. Somewhere around 2020, Americans over the age of 65 will outnumber those under the age of 13. By the year 2030, Americans over 65 will total 69 million--almost double the number today. And, though by the year 2005 the number of Americans aged 100 years or older will be only slightly more than 100,000, futurists believe we'll soon live to be 150. "These will not be years of infirmity," says Bell, "but of vigorous, active middle age."

This dramatic change will affect the market, the labor force and businesses themselves. "There will be all kinds of opportunities, including the provision of new products and services, especially those having to do with lifetime education, personal satisfaction or self-enrichment," says Bell.

Regarding labor, Bell sees "the length of human life as a tremendous opportunity. Older workers tend to be more dependable and reliable than younger workers, more likely to show up for work every day, on time, and stay all day."

Even the face of businesses should mature, as business owners reap the benefits of more productive years and alter their companies' structures accordingly. "I see an increase in wisdom in the world because as people get older, their priorities change and their understanding of the world changes," says Bell. "Status and upward mobility matter less, and being a decent person matters more."

*The next generation of entrepreneurs. Today's youth have a few strikes against them--one of which, Birch contends, is the educational system. "It's the most backward part of American society today," he says, citing the slowness with which change in the system occurs.

But despite this flaw, Birch doesn't believe the trend toward entrepreneurship will wane in the future. "While I'm pessimistic about our education system, I'm enormously optimistic about entrepreneurs' ability to overcome [its flaws]," says Birch. "We're just blessed with a natural pool of entrepreneurs."

Gerald Celente, founder of The Trends Research Institute and author of Trends 2000 (Warner), has dubbed the younger siblings of Generation Xers "hippies 2000" and is optimistic that they'll overcome more than the educational system. "They will be the new revolutionaries," Celente contends. "Instead of boomers, who protested against Washington and the Pentagon, these children are going to protest against corporations, greed and materialism."

Young entrepreneurs will be "developing products and services with compassionate capitalism," says Celente, "which means they'll promote social responsibility and produce genuine quality-of-life items without plundering the earth."

This generation will "bring us away from the one-dimensional philosophy of the industrial age, which relates to finance," Celente adds. "People are going to realize they have a greater purpose in life than
just economic gain. They'll be not just taking, but giving."

*Labor force. "The number-one problem facing small businesses today is the lack of a skilled work force," says Birch. By most entrepreneurs' standards, finding qualified workers is already a problem; by 2017, the labor shortage may be even more extreme. "Any time I run an ad [for a job opening] on the Internet, a quarter of the people who respond are from China," says Birch. "We have a global labor force now, and they're very talented, but I can't hire them because of anti-immigration legislation."

If the government maintains its regulations against immigrants, Birch expects a drastic change: More U.S. businesses will consider picking up and moving overseas. "The big difference between now and 20 years ago is that businesses can do that more easily," says Birch.

*International relations. The need to hire from an international talent pool won't be the only change spurring entrepreneurs to go global. "Twenty years from now, there will be a global middle class of such enormous size that we can't even imagine what it's going to mean," says Wacker, who estimates this market will reach 3 billion by 2017.

Besides the growing middle class, the hot market overseas will be women. In fact, Bell considers the worldwide liberation of women one of the most significant events of the next 20 years. "In most of the world today, women are not liberated; they are not living lives of their own choice," he says. "When they do, there are going to be tremendous opportunities to provide products and services for their needs, wants and hopes."

No matter how you slice the global market, you come up fruitful. "Today, a small business can do a deal with China and be off and running, and dominate the Asian market in that product or service. You couldn't do that 20 years ago," says Birch. "It used to be only the top 200 firms exported. Now 96 percent of all exporters are considered small businesses. And their share of dollar value is going up quickly. The trend of a tiny company becoming a global player has really only just begun."

In fact, by all accounts, the global market is where the serious players will be. "We're only 5 percent of the world's population, for heaven's sake," says Birch. "China's growing 9, 10 percent a year. If we can get out from this wall we live behind and get out there, this trend represents enormous opportunity."

*World peace. Yes, even world peace is on the agenda for entrepreneurs in 2017. "There is a move toward a global ethic, the spread of concern for human beings everywhere on the earth," says Bell. "The business world is central [to this movement] in many ways. Transnational corporations are responding to opportunities all over the world. All businesses have a stake in creating sustainable development, a world in which everyone is included."

With small businesses picking their employees, their customers and their business partners from overseas, global cooperation may be within reach. "The good news is that it's probably the best form of world peace known to man," says Birch. "If we're all investing in and trading with each other, we're certainly not going to shoot each other."

Best Face Forward

If you find the burden of world peace a little overwhelming, consider the idea that although personal computers, fax machines, modems and the Internet have made doing business easier and more efficient, the technological advances of the past 20 years are nothing compared with what the future holds. "The impact of the computer really hasn't been felt yet, and that's probably something that will happen in the next 20 years," says Birch.

Yet even the most powerful technological innovations will not in themselves bring about the good or prevent the bad. As Celente points out, the telegraph was expected to revolutionize the world, but it didn't prevent the Civil War. The advent of radio and movies changed the way we communicate, but it did nothing to prevent two World Wars. The introduction of television certainly has done nothing to prevent violence on the American streets or the dissolution of the American family. And we all know the computer revolution has not by any means decreased our workload.

"Yes, the digital revolution is a major trend. Yes, it's changing the way we live and work," says Celente. "But it's not more powerful than ideologies. It's just a tool, a means to an end. This stuff is only a technology. It's when ideas change and people change and what's being communicated changes--that's when things really change."

Perhaps it is entrepreneurs who are best suited to face the future. "Some people look at problems and pull their hair and moan. And others say `This is a problem, and I can turn it around and make it into an opportunity,' " says Bell. "A problem almost always [presents] an opportunity, if someone has the imagination and the lateral thinking to see it."

Take comfort, too, in knowing that in reality, the future comes on gradually, so intertwined with our everyday existence that grasping the concept is easier than it seems. Herein lies the key to putting the future in perspective. The future will happen in spite of us; it's not ours to control. And while we can attempt to anticipate and manipulate time, we certainly don't have the power to regulate it. "Regardless of what technology comes up with," says Celente, "there will still be only 24 hours in the day."