Is the Internet the solution to non-college unemployment?

Posted at 1:00 am on 06/12/2014 by Dr. Rahul Razdan

Since the great recession of 2008, unemployment has been stubbornly high. The level of unemployment diverges greatly between college educated (under 4%) and non-college educated (almost 10%).

 

Like many of you, I have always thought about the Internet as a disruptive technology which can bring great efficiency to various markets, but certainly does not help with employment. In fact, one could reasonably argue that platforms such as Amazon or Craigslist have had the opposite effect in their respective industries. However, the small business segment, the biggest segment driver of job growth, the story might well be different.

 

Small businesses (over 28 Million in the US alone) offer critical products/services, which are valuable for their customers. However, unlike large enterprises, it is exceedingly difficult for small businesses to excel in all the key aspects of their business including business development, marketing, administrative operations, and customer support. Fundamentally, they face large fixed costs which cannot be amortized with volume of business, and the breadth of the skills involved is daunting. The Internet has the potential to resolve many of these challenges, and if successful, significantly raise the productivity of these businesses. With this productivity gain, they can service more demand, grow their businesses, and hire staff.

 

With the above thought process in mind, we launched a company, Ocoos, to significantly address the core issues for small businesses. We marketed the solution as easy to use as Facebook. However, as we engaged with the market, we made some surprising observations:

 

  • A significant percentage of the SMB market consists of businesses run by owners who are older (50+) and are relatively uncomfortable with technology. They are even uncomfortable with computers much less the internet/ cloud/ mobile/ social.
  • These businesses recognize the need to engage with the internet, but are not equipped to make this transition.
  • They would love to outsource this activity but are very sensitive to pricing. In addition, given their discomfort with technology, they would prefer a face-to-face interaction to communicate the key aspects of their business. This is not an operation which can be easily out-sourced.

 

In the meantime, we found that the younger generation kids (including the non-college educated) are very comfortable with computing devices as well as the internet. They live in the world of Facebook, Twitter, and Pinterest. A connection of the two worlds certainly seems to make sense, and we have indeed taken high school graduates and successfully trained them to help business owners.

 

It occurs to us that a training program at the high school, vocational school, adult education, and community college level focused on teaching of the basics of digital marketing with platforms (not requiring programming skills) would be beneficial for all involved. For the non-college educated youth, along with their chosen professions (auto repair, baking, construction), they can be taught the mechanics of digital marketing augmented with practical training on the appropriate internet marketing platforms. With this knowledge, they become significantly differentiated relative to their peers in the marketplace. For the SMB businesses, engaging with someone who can help them bridge the technology divide without the cost structure of the college-educated workforce is very attractive. Done at scale, the combination would seem to lead to a virtuous cycle of benefit for all involved.


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