2009 Top Small Business Trends
1. The Recession Drives Small Business Innovation: With the economy mired in a deep recession, small businesses will focus on cash flow, cost containment, customer retention and survival. But economic stress will also lead to a wave of small business innovation. Driven by the need to improve productivity and increase customer value, small businesses will re-evaluate, re-design and refine their products, processes and business models. Despite the adverse economic climate, innovation will create new opportunities for many small businesses.
2. Government Plays an Increasing Role in the Economy: Economic turmoil, corporate malfeasance and regulatory failure are leading to much greater government intervention in the economy. While we believe that the long term, global trend towards market capitalism continues to be strong, governments around the world will take a more active role in managing and regulating their economies. Small businesses will need to be aware of federal, state and local government policy and program changes and their impacts.
3. Global Infrastructure Spend: President-elect Obama and his transition team are preparing a massive, $850 billion economic recovery package. China, Japan, the EU and other countries are also developing large infrastructure spending programs. In the US bridges and roads, alternative energy, transportation, clean tech and education will likely see substantial federal spending increases with the impacts likely being felt in the second half of 2009. Small businesses will benefit directly through government contracting programs targeted at them and indirectly through providing goods and services to larger firms.
4. The Number of Small Businesses Will Increase in 2009: With job losses high and traditional employment options limited, many will turn to self-employment and small business in 2009. The prior three recessions have seen small business formation rates increase. And with it easier and cheaper than ever to start small or personal businesses, we expect a strong year for small business formation – especially personal businesses. Failure rates will also increase, but not enough to offset the number of new small and personal businesses.
5. Small Business Globalization Will Temporarily Slow: While we believe the long- term trend towards small business globalization is still strong, we expect small business globalization to slow in 2009. The primary reasons are the global economic slump, turmoil in currency markets and small businesses focusing on local markets. We expect small business exports to pick up in late 2009 as the global economy starts to recover.
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