There is a new government report on business trends. It found that the current economic recession has been a stimulus for entrepreneurship. By examining the percentage of people who start their own companies, it found that in 2008, there was 3% went up to 6.5% in 2009, then 12% in 2010, and 18.5% in 2011. The interesting fact is a similar situation also happened in 1978. During this economic recession (1978-1982) Steve Jobs started Apple and Bill Gates started Microsoft which stimulated the explosion of the electronic, computer and software industry. The report concluded that economic difficulty tends to stimulate the entrepreneurial spirit.
If history repeats itself, we can predict that current economic recession may create another trend in entrepreneurship with new companies and new industry. The question is what would be the emerging trends? Today we are seeing that business and information technology are merging and create new industry where mobile technology, cloud computing technology, biotechnology and nanotechnology are creating new ways of meeting society needs. These innovations are no longer belong in research laboratories or universities but quickly become business value that facilitates startups. Technology and increasing global competition are forcing companies to offer new products and services to differentiate them from others. Business strategies are changing as they are driven by new opportunities in a dynamic global rather than local market. By closely follow business and market trends, an entrepreneur can identify new demands, new customer preference and seize those opportunities.
For years, most products are physical objects and most inventions are of physical nature. To start a company requires capital (a lot of money) to invest in office buildings, factories, warehouses to store raw materials, large machines and equipments, and lot of workers to develop the product. (Car, planes, steel, etc.) Deliver products to customers also requires transportation (Truck, bus, railroad, boat or plane). Basically only people with a lot of money can start company. During the industrial age, big companies were the foundation of the economy as they hired hundred thousands of workers (Car Company, Oil Company, Plane Company, steel company).
Today with information technology, products are no longer necessary be in physical form but can be in digital form or bits (Software). To start a company does not require a lot of money since there is no need for big factory, warehouse, large machine or lot of workers. It is possible to start a software company with only one or few people; they can work at home (or at university) using their laptops. Product can be delivered to customers via the internet (No need for transportation). If we look back, Microsoft started with two people, Apple also started with two, and Facebook started with four people but there is one important factor: They all have special knowledge and skills in technology. Their success is also depending on their workers to have these skills. For this reason, capital is no longer the main asset but the capability of workers is the company asset. (What will happen to Microsoft, Google if they do not have skilled people? The answer: Empty building). In this Information age, it is the small company; a lot of them will be the foundation of the economy. Of course, when they are successful they can grow big and hire more people. Beside software company, the Internet also creates a new group of company that sell things, including physical products, over the internet: “The online stores” such as Amazon, Zappos, Dell and these companies are changing the commercial market.
Physical products sold through physical delivery channel (Physical stores and transportation) are the old way of doing business. The new way is digital products sold through digital delivery channel or the internet that has global customers. Global market is ten or hundred times bigger than local market, if you succeed, your profits can be ten or hundred times more. Creating digital products requires investment but a different investment: The education investment. To succeed in the Information age, a college education in STEM areas is a must (Science, Technology, Engineering and Math) because STEM is the platform where innovation is created. If you want to create something in this field, you must have knowledge and skills which mean you must invest in STEM education.
As market demand changes, as customer preference also changes, the faster you can change, the faster you can deliver products to meet market demand is the new way of doing business. The new rule of Information age is: “The big will not beat the small, but the fast will beat the slow”. Today speed is the new rule and company must adapt to this new way of doing business quickly. That is why small company has advantage because they can change faster. By gather customer’s information, by follow market trends, by monitor technology changes and quickly adjusts and set new position in this dynamic market, an entrepreneur can seize the opportunity and be successful quickly.
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Prof. Vu
Carnegie Mellon University
source: http://www.segvn.org/forum/mvnforum/viewthread_thread,2054
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