Future Sense – The Future of Small Business
Future Sense – The Future of Small Business
One of the oft-cited constraints of the Singapore economy is our small domestic market. This in turn begs the question, how many truly global companies can Singapore realistically grow?
This may be of less concern in the future as the industry trends suggest that many industries are moving to a “barbell-structure” with a few giant corporations on one end, a narrow middle and a large group of small businesses balancing on the other end. According to a new study done by the Institute of the Future (IFTF), there will be significant opportunities for small businesses in the future.
The high-res version of the chart is available for download here.
The re-emergence of “artisans”
IFTF’s latest study suggests that the next decade will see a re-emergence of “artisans” as an economic force. This new generation of “artisans” will be amplified versions of their medieval counterparts. These merchant-crafts people will produce one of a kind or limited runs of specialty goods for an increasingly large pool customers seeking unique, customized or niche products. They’ll be equipped with advanced technology, able to access global and local business partners and customers, and will be capable of competing in any industry. Their firms will be agile, flexible and will often partner with larger firms to accomplish their business goals. Most will be knowledge artisans, relying on human capital to solve complex problems and develop new ideas, products, services and business models. These artisans will attract and retain highly skilled and creative and creative talent by offering freedom and flexibility and in many cases highly competitive compensation.
The study identified 3 key trends for small businesses -
1. Most industries will move to a barbell-like structure, with a few giant corporations on one end, a narrow middle and a large group of small businesses balancing on the other end.
Niche opportunities for small businesses have drastically increased over the last decade. Small businesses will be better positioned to provide customers with highly targeted, customised and relevant products and to serve these emerging niche markets. They will also benefit from outsourced innovations from bigger businesses.
2. Many business infrastructures will be reduced as smaller, lighter and smarter components and manufacturing systems emerge.
New manufacturing technologies will allow small businesses to fuel small-scale and specialised production and to lead the market in meeting the demands of customisation. Plug and play infrastructure will enable small businesses to take advantage of large-scale infrastructure and leverage new technologies that were previously only available to big business. For example, open source hardware and equipment consists of Lego-like modules that can be easily mixed and matched to create new or specialized devices. This will enable small businesses to build electronic devices like cameras and keyboards without understanding hardware design or solid state electronics. This shift to variable cost structures for core business operations will reduce risk and increase opportunities for small businesses and make it easier to start a small business.
3. Cross-border business opportunities, improvement in technology and reductions in the cost of exporting will drive small business globalization.
Taking advantage of new business opportunities, reduced formal and informal trade barriers, improved technology and access to lightweight infrastructures, small businesses will increasingly participate in cross-border trade. Social networks will fuel borderless commerce and will “mute” small trade barriers (e.g. cultural differences etc). At the same time, small business (particularly those established by immigrant entrepreneurs) will diversify and help to increase cross-border trade, unlock new opportunities and amplify economic value.
The study suggests that there will be significant opportunities for small business over the next decade. How can small businesses in Singapore effectively take advantage of these opportunities by becoming more like “artisans” – producing high-quality, high value-added specialty goods for the discerning consumer? Is there a role for our agencies to play in enabling small businesses to grow into this role?
1. Full report:
2. Earlier IFTF studies on the future of small business can also be found here: