Megacorporations, including GE (GE
), American Express (AXP
), and Ernst & Young, meet regularly with futurist Arnold Brown for his advice on trends and how they can best navigate them. Brown is chairman of trend-analysis and strategic-change-management firm Weiner Erdrich Brown, based in New York City. For the last 40 years, he has monitored 75 influential publications regularly as a way to identify what's in store for the economy, politics, technology, and global society.
Brown spoke recently with Smart Answers columnist Karen E. Klein about trends affecting entrepreneurs and how they can best respond. Edited excerpts of their conversation follow.
How do you identify trends before the rest of us catch on?
We have four criterion we've identified. First, we look for things that are new, which we typically find in science and technology publications. Then we look for things that are like pieces of a jigsaw puzzle, things that provide a clearer picture of something larger that's going on.
We also look for things coming from surprising sources. When liberal economic publications started including articles on conservative economic theory in the 1970s, for instance, we identified the trend that led up to Ronald Reagan's election in 1980.
Finally, we look for things that credibly contradict what we believe we know. A lot of people in our business become known for identifying certain trends and then they get caught up in constantly looking to validate those trends, which distracts them from spotting new ones.
You've identified several trends that affect small-business owners. One of them you call "luxury fever." Can you explain that?
There have recently been significant changes in the definition of luxury. It used to mean very expensive products in limited supply, with great demand. Only a few people who had a lot of money or access could afford luxury items. But there's so much money now in the world that people having "things" is no longer a luxury. But having certain experiences is, especially if they're experiences not everyone else can have. Time is another new luxury.
So if you have a small business that can give people a unique experience, you can sell them a luxury. If you can increase people's time by reducing the effort or time they have to put into things, you're giving them a luxury. There are 7 million millionaires in the U.S. alone, so a small-business owner would do well to think about what he or she would like to have, what she would be willing to pay a lot for, and how she can provide that same thing to somebody else.
Can you think of any examples of small-business owners capitalizing on "luxury fever"?
We knew a middle-aged guy who was laid off his job and having trouble getting hired, and he noticed that the mothers in his neighborhood were constantly on the road taking their children to and from organized activities. He decided to buy a couple of vans and start a business ferrying all the neighborhood kids around, providing the luxury of time to those mothers. And they were very happy to pay for it!
One of the fastest-growing small businesses in the country is the personal chef. Couples who are both working full time find that for a little extra money each week they can have all their meals prepared for them. And that's a luxury even middle-income people are willing to pay for.
Another trend you've identified is that the Gen Y generation is starting to go abroad to look for employment. What's going on there?
Young people who have gone through a lot to get educated are finding that there are now computer programs that can do what they were trained to do -- or people in India who will do what they were trained to do for a quarter of the price. Meanwhile, colleges are starting to make semesters abroad routine, rather than rare.
So more Gen Y people have lived abroad, and they're looking abroad for work. Europe has great shortages of certain kinds of workers, and they don't like to bring in workers from outside the developed world, but young Americans are acceptable.
How will that trend affect small employers?
Small business will have to compete even more with big business in terms of hiring good people. But then again, smaller companies have always had to come in with extra value, either an ownership share or the possibility of being part of growing something important.
I also think, though, that large companies aren't quite as attractive as they used to be. There isn't the kind of job security there once was, your chance of getting premium insurance benefits is reduced, and great pension plans are practically nonexistent these days. So small companies can capitalize on all that when they're recruiting and can emphasize why it pays capable, ambitious young people to come to work for them.
Have you seen other employment trends that might affect entrepreneurs?
Another thing we've noticed is that Gen Y people aren't very receptive to the kind of regimentation that you find in big companies. At a smaller company, they're probably not going to have to conform to company policy like they would in a corporation, where there are lots of people who do nothing but police other people. So, if you want to be a free spirit, you've got a better chance in a small company. That's a selling point.