Our overall economic outlook for 2013 is for continued moderate growth with U.S. GDP increasing 2.25% to 2.75%. We expect hiring and the job market to continue to improve with unemployment falling and finishing the year in the 6.8% to 7.2% range.
1. Big Data for the Little Guy: Big data is big news these days. Yet much of the discussion has been about how big data will help big businesses. But the data and analytics revolution will also benefit small businesses. 2013 will see rapid increases in the number of small businesses using powerful yet inexpensive cloud-based data and analytical tools. These systems will deliver meaningful insights on customers, markets and competition and will also improve bottom-line business results. This trend comes from our work with Intuit on The New Data Democracy.
2. Smartphones, Tablets and the Cloud Rule the World: The growth of smartphones, tablets and cloud computing – and their impact on business – is hard to overestimate. In 2013 small businesses will need to do more than just make their websites mobile device friendly (few currently do), they will need to re-think how they operate and serve customers in a world dominated by mobile and cloud computing.
3. The Solo Support Industry Grows Up: 2013 will see the continued growth of products and services designed to make it easier for solopreneurs and the self-employed to start and operate their businesses. Expect more niche online marketplaces like Elance and Task Rabbit to connect independent workers with the organizations looking to tap their services; more educational programs and government support for starting and operating a self-employed business; more services and tools to help manage a solopreneur business; and more coworking and solopreneur-oriented commercial workspaces. We borrowed this trend from the 2013 Future Workforce Trends from our friends at MBO Partners.
4. Small Business Hits the Road: One of the most interesting findings from ourfood truck research project is how quickly other industries are discovering the advantages of taking to the road and going to their customers. We expect this form of “mobile commerce” will take off in 2013 as personal service firms, retailers of all kinds and even industrial firms take advantage of the lower costs, increased flexibility and high levels of customer satisfaction that mobile business provides.
5. Go Midwest Young Man (and Woman): There’s an economic renaissance happening in the Midwest driven by the rising demand for commodities, an energy boom taking place in many Midwestern states and the growth of reshoring of services and manufacturing to the U.S. Technology now better connects the Midwest to the rest of the world, and the cost of doing business is lower than in many coastal states. These trends are resulting in strong Midwestern economies, low unemployment rates, strong net migration and lots of small business opportunities.
6. Angels Will Fear to Tread: Over the past few years there’s been a boom in Angel investing. According to the Center for Venture Research at the University of New Hampshire, 66,230 companies received $22.5 billion from Angels in 2011. They also report 2012 will likely see an increase in these numbers. But at the same time, A and later round funding by traditional VCs has declined, with only about 4,000 firms receiving these rounds in 2012. Traditional funding is expected to be even harder to come by in 2013. This, coupled with intense startup competition, will result in many Angel backed firms failing. Because of this, Angels will learn how hard it is to make money as a startup investor and the Angel investing frenzy will subside.
7. Small Manufacturing Gets Big: 2013 will see the continued growth of the small manufacturing sector. Driven by 5 strong trends – (1) technology and variable cost business models are making it easier and cheaper to be a small manufacturer; (2) rising overseas costs are making U.S. manufacturing cost competitive; (3) developing world economic growth is leading to stronger export opportunities; (4) the Internet and online systems are improving the ability of small manufacturers to find, sell and support customers; and (5) growing demand for customized and niche products both locally and globally – small manufacturing will thrive.
8. Time is More than Money - Time has become the scarce commodity of the 21st century. Life for both consumers and small businesses has become more connected, complex and on-demand, making it hard to get a day’s tasks done. The debated work-life balance has morphed into a more realistic discussion of work-life flexibility as we become more aware of a limited hourglass. In 2013, products that help users manage time, life and work effectively will be in demand, as will services targeted to relieve our schedules of mundane tasks and improve personal experience (see trend 4, Small Businesses Hit the Road). Time scarcity will spur growth in the personal services economy and related employment.
9. Consumers Embrace Hyper-Transparency: 2012 was the year showrooming - the trend towards shoppers visiting stores to see a product, but then buying it online or from some other store – reached the mainstream. 2013 will see the showrooming trend gain even more traction and expand beyond price with smart phone and data-powered customers and competitors getting ever-greater, real-time access to information on small business products, services and business performance.
10. Planning for Obamacare: The election results means Obamacare will be the law of the land for at least the next 4 years. With most of its major provisions coming online in 2014, 2013 will be a year of health care planning for small businesses. While most of the focus of the law is on firms with more than 50 employees, owners of smaller firms will also need to review their personal and business health coverage due to changes caused by the law.