Normal? What’s That?
Prescription for Problems
A Shifting Small Business Landscape
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The conclusion that the United States faces competitive pressure and daunting obstacles to building a stronger economy didn’t come as a surprise to Richard Attias, organizer of the New York Forum and one of the original organizers of the Davos World Economic Forum.
“We are definitely living in a world where there are four or five champions,” Attias said in an interview with Portfolio.com. He expects the rise of China, South Korea, Brazil, and an eventual rebound of Japan to create a different economic dynamic throughout the world in the coming years.
“Definitely I think we are living in a multipolar world,” Attias said. That means that innovations that may have once come from the United States could come in the future from any of those rising nations, or others like Israel. It doesn’t mean the United States will become a second-rate power as much as it means that there will be other companies in strong economic positions too.
Elsewhere in the survey by The Business Journals, a picture of a small-business landscape in slight recovery emerges. The United States lost more than 150,000 businesses from 2007 to 2009, from 7.69 million to 7.49 million businesses with between 1 and 499 employees. Last year, there was a slight (0.83 percent) recovery, putting the number of these businesses at 7.55 million.
Among other findings:
- 77 percent of business owners expected future prospects to improve.
- 57 percent said yes to the statement “I expect my business to grow a good deal over the next few years.”
- 72 percent are very concerned about the rising cost of health care and benefits, and many say much of any increases in spending they’re planning will likely be sucked up by those costs. (Click here to read more about attitudes on health care spending.)
- 53 percent are very concerned they’ll have enough money to retire, a decrease from last year when 57 percent expressed that fear.
- 72 percent of bosses are concerned about the state of the economy, and 53 percent are concerned about piling up enough cash to retire.
- Business owners expect to spend an average of about $20,000 more in 2011 than they did in 2010, and nearly half of that increase will go to employee benefits. The other big increase in spending comes down to investment.
(For a deeper look into the survey results, click here to explore an interactive.)
Phillips said that overall, the survey shows small-business bosses are poised for growth, although it will remain slow. “Business has just settled down, and it’s starting to move up,” he said.
Yet even as they emerge from the worst economic downturn since the Great Depression, American small businesses will be entering into a world in which global competition is as important as domestic success.
And, Attias argued, it’s also a world in which the pace of change will challenge any leader, large or small.
“Before, we used to think in terms of 15-year cycles,” Attias said, meaning 12 to 13 years of growth followed by a couple of recessionary years. Now, such thinking doesn’t fit a volatile world. “Long term is six months,” he said.
Kent Bernhard Jr. is News Editor of Portfolio.com
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