46. More entrepreneurs start new businesses every year.
In the United States, about 9 percent of men and 6 percent of women are self-employed. These fractions have been growing in about two-thirds of the OECD countries. Many women are leaving traditional jobs to go home and open businesses, even as they begin a family. At least half of the estimated 10.6 million privately held firms in the United States are owned by women, employing 19.1 million people and generating $2.46 trillion in sales annually.
For the 14 years ending in 2003, the most recent period for which data is available, small businesses (those with less than five hundred employees) created 92 percent of the net new jobs in the United States, according to the Census Bureau. The smallest companies, those with fewer than twenty employees, created 85 percent. However, jobs also disappear fastest from small companies, which are much more likely to fail than larger concerns. Though big-company layoffs have gotten the most publicity in the current recession, losses from smaller firms are likely to be even more severe.
Assessment: This is a self-perpetuating trend, as all those new service firms need other companies to handle chores outside their core business. It will remain with us for many years, not only because it suits new-generation values but because it is a rational response to an age in which jobs can never be counted on to provide a stable long-term income.
Implications: It is driven as well by the attitudes and values of Generation X and the Millennials and by the rapid developments in technology, which create endless opportunities for new business development.
Specialty boutiques will continue to spring up on the Internet for at least the next 15 years.
Implications for hospitality and travel: We can expect a wave of new hospitality and travel businesses to appear in the years ahead. Many will be new destinations in areas where the travel industry is just beginning to grow. Others will be specialty tour operators focused on either niche sports and other activities or on consumer groups with special needs, such as non-English-speakers, religious or cultural minorities, seniors, or all-female tour groups.
47. Information-based organizations are quickly displacing the old command-and-control model of management.
The typical large business has reshaped itself or is struggling to do so. Soon, it will be composed of specialists who rely on information from colleagues, customers, and headquarters to guide their actions.
Upper management is giving fewer detailed orders to subordinates. Instead, it sets performance expectations for the organization, its parts, and its specialists and supplies the feedback necessary to determine whether results have met expectations.
Assessment: This is a well-established trend. At this point, many large corporations have restructured their operations for greater flexibility, but many others still have a long way to go.
This trend will continue in the United States for at least the next 15 years. The developing world may largely bypass this step in its new organizations and go straight to networked management structures.
Implications: This management style suits Generation Xers and Millennials well, as it tends to let them work in whatever fashion suits them so long as the job gets done.
Downsizing has spread from manufacturing industries to the service economy. Again, this process encourages the entrepreneurial trend, both to provide services for companies outsourcing their secondary functions and to provide jobs for displaced employees.
Many older workers have been eliminated in this process, depriving companies of their corporate memory. Companies have replaced them with younger workers whose experience of hard times is limited to the relatively mild recession since 2000. Many firms may discover that they need to recruit older workers to help them adapt to adversity.
This too is driving the entrepreneurial trend. Many older workers find themselves self-employed by default, as they need income and cannot find work in their accustomed fields.