Small Business Labs

JWT Intelligence's 100 Trends for 2015

JWT Intelligence is the trend spotting group of JWT Worldwide, which is one of the world's largest marketing communications firms.

They recently released their annual trends list, The Future 100: Trends and Change to Watch in 2015 (free, but registration required).  

Their 100 trends (and yes, they really include 100 trends) are broken into 11 categories this year and cover everything from culture, to food and drink, to technology.  

I won't attempt to synthesize their 110 page report, but below are a few trends that jumped out at me.

The Long Near Game: This is the trend towards companies increasingly doing both short and long term planning. Key quote:

Many companies are setting up long-view projects to analyze how macro shifts in the economy and consumer trends will affect them.

According to JWT, they are doing this to better understand how longer term shifts will impact their business models and long term viability.  

As someone who does this type of work, I find this trend pretty exciting.

Broga Wear Arrives: Broga is the trend of men taking up yoga. Broga wear is yoga clothes for men and is exemplified by Lululemon opening its first men's store. 

While I'm excited to hear yoga is becoming more popular - I've done yoga for decades - I have no interest in becoming a mamil - a term used to describe middle aged men wearing lycra bike clothes, now being extended to include lycra yoga clothes.  

So no Broga wear for me, but I agree this type of clothing will likely become very popular.  

3D Printing Grows Up: 3D printing is one of the most hyped technologies of the last few years, but still remains far from a mainstream activity for consumers.

JWT thinks the emergence of service providers who do the hard work associated with 3D printing will change this and start to bring this technology into the consumer mainstream in 2015.

We Don't agree and believe 3D printing is still several years away from entering the mainstream for consumers.

But we agree 3D printing is advancing and we think 2015 is the year it starts to enter mainstream use by small businesses, who are increasingly using this technology for prototyping and small batch manufacturing.

Because of this, 3D Printing is on our Top 10 Small Business Trends for 2015 list.  

For info on their 97 other trends, head over to their website and download the full report. Or, look at the Slideshare below.

JWT: The Future 100 from JWTIntelligence

Top 10 Small Business Trends for 2015

Top 10 Small Business Trends for 2015

Below is our 8^th annual Top 10 Small Business Trends List. Click here to see last year’s list and for links to the lists from prior years. 

2015 Technology Trends

The ongoing technology platform shifts to Cloud and Mobile Computing will continue as long term drivers of change in 2015. While each is important and powerful on its own – and both have been listed individually multiple times in our top 10 lists from prior years - their growing convergence is amplifying their impact and fundamentally altering how business is done.

1.  Cloud Automation tools are simplifying a wide range of traditional small business applications such as accounting, payroll, inventory management, HR and benefits administration, etc.  Cloud tools from companies like Zenefits (HR administration), Intuit (QuickBooks Online), Nimble (CRM) and others are not only simplifying business processes; they’re allowing workflows to be reimagined and reengineered – saving time and money and creating new ways of working. 

2. Ambient Proximity: OK, I admit this is on the list because it’s such a cool buzzword. Ambient proximity refers to the ability of smartphones to interact seamlessly and autonomously with their surroundings thanks to the growing deployment of “Beacons”. These inexpensive devices use Bluetooth to automatically push information back and forth between themselves and nearby computers (usually smartphones). Already in use by Apple and other major retailers, Beacons are being used for applications such as in-store customer service notifications, special upgrade offers and personalized marketing messages.  

 3. 3D Printing:  Despite being one of the most hyped technologies of the past few years, we’ve resisted adding 3D printing to our top 10 lists due to technical shortcomings – until now. Improved hardware, cheaper and better performing input materials and the emergence of 3D printing service providers are turning 3D printing into an increasingly viable small business prototyping tool and, in certain situations, small batch manufacturing platform. 

4. Security and Privacy:  Due to a series of high profile cyber security breaches (Target, Sony, etc.) consumers and business customers have become much more concerned about information and data security and privacy. Add to this a growing wave of cybercrime – which is increasingly targeted at small business through the use of automated online bots – and 2015 looks like a year when online security and privacy will be major small business issues.

2015 Economic Trends

Despite signs of a global slowdown, our 2015 U.S. economic outlook is for continued solid if moderate growth with U.S. GDP increasing in the 2.75% to 3% range.  

5. Energy: Oil prices have fallen from over $100 per barrel in July to about $57 dollars today. This rapid decline will be felt across the economy – in both good and bad ways – in 2015. The major positive is, of course, lower energy bills. But there is a negative side to declining oil prices. The U.S. energy sector has been one of the strongest sources of recent economic growth, creating both direct and indirect market opportunities for many small businesses. These firms will be hurt as the energy industry cuts back due to lower prices. While the net economic effects of declining oil prices are positive, small businesses need to evaluate the impact of lower prices to see if they are energy winners or losers.  

6. Crowdfunding Moves Towards the Mainstream:  Crowdfunding is not a new trend, but until recently few small businesses used this method to finance their business. This is rapidly changing as growing numbers of firms successfully raise money via crowdfunding platforms. 2015 will see this growth continue and will also see equity crowdfunding start to gain traction. While legislation allowing this form of equity financing remains stalled at a national level, about a dozen states now allow equity crowdfunding. Small businesses in these states will start to take advantage of this option in 2015.

7. The Shift from Jobs to Gigs:  Instead of traditional job identities, workers are increasingly relying on a portfolio of talents, skills and occupations to create multiple streams of income via a mix of traditional jobs, independent work and/or part-time gigs.  These portfolios of gigs may or may not map with one particular career path and are driven by the need to earn income, uncertainty due to a lack of job security and the desire to work in meaningful and/or interesting ways.

8. Corporate HR Departments Wake Up about the Contingent Workforce:  Long viewed by corporate HR departments as a way to save money, the independent workforce (freelancers, contractors, independent consultants, etc.) is increasingly being seen as a strategic resource. Corporations large and small are turning to independent workers to increase workforce agility and flexibility, provide specialized and/or hard to find talent and even add competitive advantage. This shift is leading to the increased use of independent workers, providing more opportunities for the growing numbers of people pursuing this path. 

2015 Social Trends

Economic uncertainty and a lack of job stability are leading to social shifts and changes in consumer behavior.

9.  The Lean Years: Coined by Millennial blogger Melina Coogan, "The Lean Years" describes the angst felt by this generation (and many of those who are older) due to a  lack of personal economic stability caused by slow growth, stagnant wages and declining job security. The resulting uncertainty is leading people to avoid long term or major commitments, both in their personal lives and as consumers. The impacts of “Lean Years” thinking include (but aren't limited to) lower marriage rates, birth rates, and home ownership rates and a resistance to large purchases of all kinds. "Lean Years” thinking will continue in 2015 and small businesses need to evaluate its impact on their firms.

10. Just in Time Learning: Long touted as the next big thing,low-cost yet highly professional on and offline short, specialized training courses and programs are finally starting to deliver on their promise of improved business education.  The hugely successful programming camps – 8-10 week immersive courses that teach programming skills – show that even complex topics can be taught relatively quickly and in a just in time manner.  These types of programs provide small business the ability to adapt and adjust to changing business conditions.  They also provide independent workers (and others) a way to upgrade their skill and/or learn new ones.  

Ford's 2015 Consumer Trends

It's predictions season and lots of 2015 trends, forecasts and predictions lists are being released.

I'll be covering several of these lists inc the coming weeks. We'll also be releasing our 8th annual Top 10 Small Business Trends list tomorrow.  

Starting our prediction season coverage is a look at Ford Motor Company's Looking Further With Ford 2015 Trends report. 

Ford's been doing annual trend reports for several years. Their reports are glossy and very well written. Their trends lists tend are consumer focused and mainstream - so don't expect to be surprised by the trends. 

One thing Ford does do differently from other corporations is include product ads in their thought leadership pieces. This is considered a thought leadershiop no-no, but I like it.

The ads link the vehicles to the trends in some manner. This helps show readers how trends are related products - which I think is useful. 

Ford's 2015 report consists of 10 consumer focused trends. These are:

1. Make Way for Gen Z
2. Rally for Renegades and Rebels
3. Flaunting Failure
4. Carry Less Movement
5. No Strings Attached
6. Expanding Next of Kin
7. Give and Take of Privacy
8. Elusive Health
9. Escape Artist
10. Many Faces of Mobility

Their "Expanding Next of Kin" section includes some good data (shown below) on one of our favorite topics, pet humanization. 

While the report is short on new insights, it does have interesting data and trend examples. It's also easy to breeze through so you can stop on the trends you're interested in and quickly skip by the others.

It's well worth reviewing by anyone interested in consumer trends.

Drones, 2nd Order Effects & Technology Forecasting

The New York Times article Now, Anyone Can Buy a Drone. Heaven Help Us covers the growing use of drones by what the article calls "troublemakers and pranksters".  

Key quote:

As the price of drones has fallen and sales have risen, the machines have emerged as central characters in stunts from the puckish to the criminal. In recent months, drone pilots have tried to smuggle contraband into prisons and disrupt sporting events at stadiums. Animal rights groups have turned to drones to stalk hunters as the hunters stalk wildlife. And in France, more than a dozen illegal flights over nuclear power plants have unnerved the authorities.

As the article points out, the vast majority of drone use does not cause problems. Also, drones are proving to be very useful for a wide variety of commercial applications in fields as diverse as farming, construction and film making.  

But a big issue related to the adoption of any new technology are 2nd order effects.

These are the actions, forces or impacts a new technology has as it moves from the fringe towards the mainstream.

Often these forces are countervailing, meaning they act against the spread of a new technology. 

The Segway provides an excellent example of countervailing forces in action.

When it was first introduced it was widely viewed as a world changing technology. Now, according to a recent article in The Week, "Segway remains one of the most memorable failed attempts at revolutionizing personal transportation.

In Segway's case the countervailing forces were safety related. It quickly became clear that sidewalks were often too narrow and crowded for Segways to be operated safely.  This led to most cities and towns banning their general use.  

Drones also face safety related countervailing forces. They also face legal and regulatory countervailing forces due to a growing realization drones can be used to create a lot of mischief.

Don't get me wrong - I like drones and think they are a very useful technology. I also think their commercial use will continue to grow at a rapid clip.

But the widespread use of drones will be constrained due to safety issues and regulatory moves to limit criminal uses. 

Not considering 2nd order effects - and especially countervailing forces - is one of the most common forecasting mistakes.  We try to avoid these mistakes through the use of scenario planning. 

For example, last year after Amazon announced they were considering using drones to deliver goods we did a series of drone related scenario planning exercises.

It took very little time to realize that the 2nd order impacts of widespread drone use (safety, criminal activity, privacy, etc.) meant there would be strong countervailing forces limiting the use of drones.

We spend a lot of time on 2nd order effects in our work. Not considering them leads to a lot of forecast errors.

Portland's Artisans

The Portland Made Collective is an association of Portland-based Makers, artisans and manufacturers. It promotes its members and their products through media and marketing support, public education, promotional events and retail sales.  

They recently conducted a membership survey which yielded a lot of interesting results. The full report can be accessed here.

Some of the key findings include:

• Most of the firms are young: 82% have been in operation 10 years or less and 63% five years or less.
• Most of the firms are small: Only 12% had revenues greater than $1 million; 50% had less than $100,000 in revenue
• Most self-identify as Makers or artisans

We found the last point really interesting, although not surprising. More and more people are seeing themselves as artisans and Makers who combine their skills, passions and interests to create their products.  

The report chart below shows how the members of Portland Made self-identify.

The Lean Years

Rarely do I read an article that captures and describes the impact of economic uncertainty on personal decision making as well as The Lean Years. 

Written by Millennial and freelance writer Melina Coogan (Twitter handle @melinacoogan), The Lean Years describes the economic angst of many Millennials (and those older).  

Key quote:

One of the reasons that I'm scared to have children is because I can't give them everything my parents gave me. I was raised in the roaring 90s and things were different. I call this time now 'the lean years.'  ... It's not that my kids won't eat or have a nice place to sleep. It's just that it feels irresponsible to even consider having another little person around to pay for when my finances are uncertain. There- that's a good word for it. Uncertain. 

The article goes on to point out that most of the good things in life are free, so things really aren't that bad.

But despite the happier ending, the impact of today's uncertain economy and the lack of stable, predictable earnings on Coogan are quite clear.

 

When you aggregate the impacts of economic uncertainty on the entire generation, you get a wide range of 2nd order economic and societal impacts.

These include (but aren't limited to) lower marriage rates, lower birth rates, lower home ownership rates, higher income inequality, greater levels of poverty - it even changes where people choose to live.

Because many of our institutions and businesses are built on the assumption of substantially greater employment stability and security than currently exits, the impacts of economic uncertainty are large, disruptive and not fully understood.

But we do know it's changing industries and creating both threats and opportunities for small businesses.

We cover this powerful trend in our Economic Uncertainty section.

The Global Shift to the Open Workforce

New Ways of Working ... Managing the Open Workforce is a fascinating study from London-based CGMA. 

Key quote on their definition of "the open workforce":

Organisations are increasingly finding themselves managing an “open workforce” – one in which talent and resources are spread across a complex mix of in-house teams, freelancers, contractors and external business partners.

One of the most interesting things about this study is the source. CGMA stands for Chartered Global Management Accountants and it's a global trade association for management accountants.  

I think the fact that CGMA has issued a report on contingent talent is a clear signal that independent workers and "the open workforce" have become of strategic importance to most businesses.

Also interesting are their findings on the growing global use of independent workers.  

As the study chart below shows, the use of external talent (independent workers, contractors, etc.) is already substantial and forecast to grow rapidly over the next 5 years in most parts of the world.

These findings are consistent with the Ardent Partners study we reported on yesterday and the research behind the MBO Partners State of Independence studies.  

Theses studies, and others like them, make it clear the shift to independent workers is not just a response to the Great Recession. This is a fundamental shift in employment and business practices.  

Why Companies Are Increasing Their Use of Contingent Labor

Ardent Partners is an analyst firm focused on corporate procurement and as part of this brief they research and analyze the use of contingent labor (temps, contractors, consultants, etc.) by corporations.

The article The Contingent Workforce Management Program of 2016 provides their view of how corporate contingent labor programs will evolve over the next couple of years.  

A major finding of their research shows the use of contingent labor by corporations has substantially increased over the past 5 years. Key quote from the article:

In 2009, the estimated percentage of contingent workforce utilization within the average enterprise hovered around 16% or 17% ... The contingent workforce of 2014 is a force to be reckoned with, as Ardent Partners estimates that upwards of a third (32%-33%) of the average total workforce is comprised of contract talent.

And according to their research report The State of Contingent Workforce Management 2014-2015 this growth is going to continue.  Key quote from the report:

Ardent predicts by the end of 2017, nearly 45% of the world's total workforce will be contingent ...

Even more interesting is why companies are expanding their use of contingent labor.  As the chart below (from the research report) shows, the key reasons are to tap into the skills and talents of contingent labor.  

This is a fundamental shift from past years, when most companies turned to contingent talent to reduce costs.

This shift - coupled with the growing recognition by hiring corporations that contingent labor is becoming a strategic HR issue - are key reasons we're forecasting the continued growth of the independent workforce.

Insight, Innovation and Finding Aha's

The Harvard Business Review article Where to Find Insight provides a good primer on how to spot trends and create business insight that can drive innovation.

The article defines insight as:

... an imaginative understanding of an internal or external opportunity that can be tapped to improve efficiency, generate revenue, or boost engagement. 

Insights can be about stakeholder needs, market dynamics, or even how your company works.

It describes 7 sources of insight:

1. Anomalies, or data that deviates from business as usual.

2. Confluence, when economic, demographic, and technological trends come together.

3. Frustrations or pain points, which lead to innovative work-arounds.

4. Orthodoxies, which can spark a search for alternatives.

5. Extremities, such as fringe members of stakeholder groups who push for solutions.

6. Voyages, whereby innovators leave their offices to visit colleagues or customers.

7. Analogies, useful ideas or systems in other teams, business units, companies, or industries.

We describe our work as finding aha's about small business and the future of work. Merriam-Webster defines aha as an interjection used when something is suddenly seen, found, or understood.

When we find something that has our clients saying "aha", we've done our job. 

We use all 7 of the insight sources listed above to do this. But we consider two to be of the greatest importance to us in our trend spotting and analysis work.

The study of emerging fringe groups or edge activities, called extremities by the authors, is one of our key research methods. For example, we started researching the coworing movement when it first started back in 2007.

Based on this research, we quickly realized coworking provided a window on the much broader topic of the future of work as well as the future of the independent workforce.  

The identification of converging trends, confluence in the language of the article, is another insight method we spend a lot of time on.  

We've long found converging and reinforcing trends drive major change. A good example is mobile computing, cloud computing and big data. Each is a powerful trend in their own right. But what's making them major drivers of change is they are converging and reinforcing one another.

5 Interesting Thought Pieces on the Future of Work

Really interesting set of thought pieces - they call them frameworks - from Society and Data on the future of work.  The 5 papers are:

• Understanding Intelligent Systems unpacks the science fiction stories of robots to look at the various ways in which intelligent systems are being integrated into the workforce in both protective and problematic ways. Much of what’s at stake in this domain stems from people’s conflicting values regarding robots, drones, and other intelligent systems.
• Technologically Mediated Artisanal Production considers the disruptions introduced by 3D printing and “maker culture,” as the very act of physical production begins to shift from large-scale manufacturing to localized creation. The implications for the workforce are profound, but there are other huge potential shifts here, ranging from positive possibilities like democratizing design to more disconcerting concerns like increased environmental costs.
• Networked Employment Discrimination examines the automation of hiring and the implications this has on those seeking jobs. The issues addressed here range from the ways in which algorithms automatically exclude applicants based on keywords to the ways in which people are dismissed for not having the right networks.
• Workplace Surveillance traces the history of efforts to using tracking technologies to increase efficiency and measure productivity while decreasing risks for employers. As new technologies come into the workplace to enable new forms of surveillance, a whole host of ethical and economic questions emerge.
• Understanding Fair Labor Practices in a Networked Age dives into the question of what collective bargaining and labor protections look like when work is no longer cleanly delineated, bounded, or structured within an organization, such as those engaged in peer economy work. Far from being an easy issue, we seek to show the complexity of trying to get at fair labor in today’s economy.

All the papers are full of insights and information and well worth reading.