Small Business Labs

"Vertiports" and Air Taxis Getting Closer

According to the Axios article Meet the "vertiport," where you'll go to hail an air taxi, the Federal Aviation Administration (FAA) is releasing "vertiport" design guidelines.  

A vertiport is where vertical takeoff and landing (VTOL) vehicles will take off and land. This is a necessary step for air taxis to become operational.

Several electric VTOL (eVTOL) manufacturers are already working on plans to build vertiports in several U.S. cities.

Two leading air taxi manufacturers, Archer Aviation and Joby Aviation have partnered with Reef, the U.S.'s largest parking management company, to build vertiports atop existing parking garages (click to enlarge image below).

After a very long gestation period - the first flying car prototypes were produced over 100 years ago - we seem on the verge of flying taxis becoming a reality.

Test flights are happening, and plans to start operating commercial air taxi services are just 2-3 years away. 

Even the big airlines are getting on board. United Airlines, for example, recently put down a $10 million deposit on 100 Archer's eVTOLs.

We're certainly looking forward to our first ride.

McKinsey's 2022 Technology Trends

Last month the global consulting firm McKinsey released its 2022 Technology Trends Outlook.  

We pay attention to McKinsey because they advise leadership teams from a wide range of organizations, including Fortune 500 firms, government agencies, foundations, nonprofits, and tech startups.

So their tech trends influence a large number of decision-makers around the world.  

McKinsey groups their trends into two broad themes, which they describe as:

"two thematic groups: Silicon Age, which encompasses digital and IT technologies, and Engineering Tomorrow, which encompasses physical technologies in domains such as energy and mobility."

They rank the trends on three metrics:

• Innovation: based on related patents and research efforts
• Interest in the technology: based on recent news and web searches.  
• Amount of investment in the technology in 2021 (size of bubble in the chart)

McKinsey also provides an adoption rate score for each technology but doesn't use that score in its ranking chart.  

This approach leads to some interesting results.

As the McKinsey chart below shows (click to enlarge), applied AI is the leading technology with a very high innovations score, coupled with relatively strong interest scores and investment levels.

Tech industry darling, Web3 scores relatively low. This is due mainly to a low innovation score - despite many techies believing Web3 is the next big thing.  

The McKinsey article provides a detailed analysis of the 14technologies in their list, and how it ranked in 2018.  

We like McKinsey's approach because they go beyond just looking at the technology and include data on the drivers of adoption.  

Anyone interested in tech trends will find McKinsey's list well worth reading.

Airbnb's Guild on How Communities Can Benefit From Digital Nomads and Remote Workers

Airbnb says its Guide to Live and Work Anywhere "provides industry-first analysis of global remote work initiatives."

This isn't even close to accurate- there have been many studies on this topic. 

But marketing hyperbole aside, the Guide provides an interesting look at how cities benefit by offering incentives to attract remote workers.

They also show the incentives cities are using. Below is the Guide chart on Tucson's remote worker incentive package.

The growing competition among cities and countries to entice digital nomads is one of the most interesting remote work trends.

Whether it's the creation of digital nomad villages, providing specialized remote work visas - or, as Airbnb's Guide points out - providing direct financial assistance, countries and cities are increasingly engaged in an arms race to attract remote workers.

Study Finds Only One Third of Americans are Financially Healthy

The Financial Health Networks 2022 U.S. Financial Health Pulse study reports that financial health in America declined across many demographic and socioeconomic groups over the past year.

This is the first time in the five years of this study that Americans' financial health declined.

As the report chart below shows (click to enlarge), the share of Americans reporting being financially healthy declined from 34% to 31%.  

The study also reports that 37 million Americans are financially vulnerable, 139 million are financially coping, and 78 million are financially healthy.

We track this data because a lack of financial health is a key driver of the growing number of part-time gig workers.

Those financially vulnerable or coping are much more likely to supplement their income with part-time, or even full-time, independent work.  

And as the Financial Health Network's findings show, 176 million Americans fall into these two categories.

This is one reason we continue to forecast that independent work and the gig economy will continue to grow.  

The report has a lot more information on the financial health of Americans and is well worth reviewing for anyone interested in this topic.

Edelman's Depressing 2022 Trust Barometer Study

We've followed the Edelman Trust Barometer research series for many years, and we consider it one of the most important studies we follow.

As we point out in the title, we also consider it one of the most depressing studies we follow. 

The reason is the study chronicles the long-term global decline in people's Trust in society's institutions.  

And the 2022 study, which is subtitled The Cycle of Distrust, continues to show this decline.

As the study chart below shows (click to enlarge), businesses are now the most trusted institution, with 61% of global respondents saying they are trusted.

The chart also points out that businesses got the top spot because their trust level fell less - down 4% points from 65% in 2020 - than governments' trust level over the past two years.  

Two of the other top 10 findings caught our eye. Key quote from the report:

Distrust is now society's default emotion: Nearly 6 in 10 say their default tendency is to distrust something until they see evidence it is trustworthy. Another 64% say it's now to a point where people are incapable of having constructive and civil debates about issues they disagree on. When distrust is the default – we lack the ability to debate or collaborate.

There is a collapse of Trust in democracies: In many of the democracies studied, institutions are trusted by less than half of their people, including only 46 pts in Germany, 45 pts in Spain, 44 pts in the U.K., and 43 pts in the U.S. Moreover, no developed countries believe their families and themselves will be better in 5 years.

These are genuinely dismal findings.

The one bright is that the trust deficit provides an opportunity for businesses that can develop a trusted relationship with their customers.  And it shows customers are willing to give businesses a chance to do so.

The Six Fold Jump in Work From Home

Nick Bloom is a Stanford Economics professor and one of the leading authorities on the shift to remote work.  

He's part of the team at WFH Research, which produces a steady stream of high-quality research and data related to the shift to remote work.  

He posted the chart below on LinkedIn yesterday. Key quote from his post:

"The shift to WFH is the largest shock to labor markets in decades. Pre-pandemic WFH was trending towards 5% of days by 2022. Now WFH has stabilized at 30%, a 6-fold jump."

Companies have been trying to get their workers back to the office, but most of these efforts have been unsuccessful.  

We continue to think the hybrid model has won, which will lead to more workers returning to offices.  

Because of this, we think the share of days worked from home will trend down to around 22%-25% over the next 2-3 years.  

This is still a substantial increase relative to before the pandemic.

McKinsey finds 36% of Employed Americans are Independent Workers

McKinsey's Freelance, side hustles, and gigs: Many more Americans have become independent workers, covers the results from their American Opportunity study.

And this study found that independent work is booming. Key quote:

"... a remarkable 36 percent of employed respondents—equivalent to 58 million Americans when extrapolated from the representative sample—identify as independent workers. This figure represents a notable increase since we estimated the US independent workforce in 2016 at 27 percent of the employed population."

The study asks survey respondents to self-identify as independent workers. Those answering yes to either, or both, of these questions are considered to be independent:

• "Is your current job as a contract, freelance, or temporary worker?" 
• "Would you consider yourself a gig worker or part of the gig economy?"

The article covers a range of data from the study, but the data on how workers view economic opportunity jumped out at us (click to enlarge the chart below). Key quote:

"Given the broad range of reasons why people work independently, it's surprising how united this group is in one distinct characteristic: they are among the most optimistic workers in the country."

Striking out on one's own requires a certain amount of optimism.  So it's not surprising to us that independent workers, on average, are more optimistic about their economic opportunities than workers overall.  

See the article for more details.

New Business Applications Continue at Historically High Levels

The number of new business applications in July was 425,698, which is another strong month.

Although down from their all-time high in 2020, applications in 2022 have averaged about 420,000 per month. This is about 40% higher than before the pandemic.

The business application data comes from IRS Employment Identification Numbers (EIN) applications. EINs are the tax id number that identifies a business for tax purposes.

Most applications (about 70%) are from firms the Census calls "applications other than high propensity" (grey in the chart; click to enlarge).

These are applications from businesses that are unlikely to have employees, such as freelancers, independent contractors, and other types of solopreneurs.

"High propensity applications" (yellow in the chart) is Census speak for firms they think are likely to hire traditional employees.

As the above chart illustrates, the share of solopreneur applications has steadily increased over the past decade.

Retail continues to be the industry with the most applications. This has been the case since the surge of applications started in 2020. Professional services is second, consistent with its position since the pandemic began.

As we pointed out earlier this year, only about 20% of applications for tax I.D.s result in a new business starting.

But the continuing high levels of business applications means a corresponding surge in new employer small businesses and solopreneurs.

Is Reshoring of Manufacturing Finally Happening?

The Wall Street Journal's U.S. Companies on Pace to Bring Home Record Number of Overseas Jobs covers data from the Reshoring Institute showing that American manufacturing firms are shifting jobs back to the U.S.

Key quote:

"American companies are on pace to reshore - or return to the U.S. - nearly 350,000 jobs this year, according to a report expected Friday from the Reshoring Initiative. That would be the highest number on record since the group began tracking the data in 2010."

Reshoring is a trend that has long been forecast to happen. The New York Times 2010 article Is Manufacturing Coming Back to the U.S. reads much like the recent Wall Street Journal article.  

And while the four words most wrong in forecasting are "this time it's different," this time it seems different.

The pandemic exposed the weaknesses and lack of resiliency in global supply chains.

And the war in Ukraine, coupled with geopolitical strife between the U.S. and China, has countries worldwide looking to become more self-reliant - or at least not reliant on countries not viewed as close friends.

This may lead to a world with two major trading blocks. Key quote from Foreign Affairs' The End of Globalization?:

"But it now seems likely that the world economy really will split into blocs—one oriented around China and one around the United States, with the European Union mostly but not wholly in the latter camp—each attempting to insulate itself from and then diminish the influence of the other."

So it does appear that reshoring - and the related trend of nearshoring - may finally be happening.  

Ezra Klein Show on Rethinking the Office and Work

One of our favorite podcasts is The Ezra Klein Show. It dives deep on various topics, the interviews are excellent, and the show's guests are experts in their field.

The show's recent episode, The Office is Dying. It's Time to Rethink How We Work, features Anne Helen Petersen and Charlie Warzel as guests.

They're the authors of Out of Office: The Big Problem and Bigger Promise of Working From Home.

Key quote from the podcast landing page describing what the episode covers:

The office is dying, but a new, viable model of work has yet to be born. And that liminal space raises all sorts of new questions: What is the office actually for? What will the post office's future of work look like? And if the future of work means working from home in some capacity, how do we make that future better for everyone involved?

We don't agree with everything Petersen and Warzel say in the podcast - especially some of their forecasts.

But they clearly have deep expertise on these topics and provide an excellent overview of the current state of the office and potential ways the office may evolve in the future.

Anyone interested in the future of work, remote work, or the future of the office will find this episode well worth listening to.

Like all Klein Show podcasts, this episode is long - 1:34. 

But one of the reasons we like The Klein Show is that it takes the time required to explore topics in-depth.