America is getting its mojo back. Once one quiets the mind to the drumbeat of negativity that passes as business and economic news, one can hear the sound of the nation’s entrepreneurial and risk-taking wheels turning.
Here are seven bold predictions for 2011:
#7. Convergence will Again be the New Buzzword. The prototype of a breakout technology company will continue to evolve from “geeks in a garage tinkering with transistors” to loosely - coupled gangs of media - savvy trendsetters that get the game of viral and cross - platform brand and buzz-building.
Doubt me? See Groupon, Zynga, and my favorite - Jessica Simpson’s fashion empire – which now includes shoes, clothing, and fragrances, and is on track to gross more than $750 million this year.
#6. Venture Capital will Rise Again. Venture capitalists invested $4.8 billion in 780 deals in the third quarter of 2010. Before the “great deal crisis” of 2008 – 2010, venture capital quarterly funding averages were in the $7.5 billion and 1,000 deal range, or 60% greater than today.
Look for 2010 funding activity to get back to these numbers and beyond in the New Year.
Far more interesting as a mega-trend: the traditional U.S. technology startup has a FAR bigger addressable market than ever before in history.
With an additional ONE BILLION people (i.e. consumers) worldwide having entered the middle class since the turn of the century, and millions more entering it every month, the world has truly become the breakout startup’s oyster. To illustrate, see Twitter, Facebook, and LinkedIn, all of which have many more overseas than domestic members.
More than anything else, venture capitalists seek BIG scores, and the world has never offered more opportunities for innovative startups to breakout fast than it does right now.
#5 American Small Businesses will Finally take the Global Plunge. The Fortune 500 have understood for years that the real growth action is to be had overseas, and today make more than 50% of their profits outside the United States. Small businesses have been late to the party, but look for that to change in 2011.
The combination of vastly increasing purchasing power worldwide, an almost evermore depreciating dollar, and the increasing ease of cross-border transactions, will drive increasing U.S. small business exports.
This can take as simple a form as more overseas visitors and purchasers to U.S. small business websites, eBay stores and the like, to foreigners increasingly investing and providing the desperately needed growth capital to entrepreneurial America.
#4. The Extension of the Bush Tax Cuts, Combined with the Payroll Tax Break, will pass and be Highly Stimulative. Putting aside the long-term impact of the deficit, passing the proposed tax cuts before the New Year will set up 2011 to be a good economic year by all the big measures – GNP growth, employment, stock market performance, and business and consumer confidence.
A key added benefit – having Republicans and Democrats working together on a big economic issue will encourage the nation’s businesses – who have cited political uncertainty again and again as a main holdback of investment and capex.
#3. Inflation will Creep up In 2011, and on Balance that’s a Good Thing. On balance, a little inflation now would be a welcome relief to the nation’s debtors, especially its homeowners. They would feel at least a nominal sense of equity and wealth in what is for most Americans their major asset.
And inflation should be good for stock prices too, as companies are usually able to raise prices faster than wages, leading to higher profits.
#2 The American Wage-Earner will Remain Under Siege. Rising inflation will only tighten the squeeze on the American wage-earner, who will see their real take home pay and sense of economic security continue to dwindle.
This is a very bad thing, and whether folks want to hear it or not, there is really very little government can do about it. Massive structural deficits at all levels of government simply make resources too strained.
As importantly, the realities of global competition aren’t just growing more intense by the day.
One powerful mega-trend to follow: Look for more and more Americans to join the 200,000 that start new businesses every month. Why? Increasingly for the simple motivation of making ends meet.
#1. 2011 Will Be the Year of the Young (and the Young at Heart). The best qualities of youth – enthusiasm, flexibility of mind and spirit, and the over-riding desire to be inspired will continue to shape the brave new economic world order.
From youth by the millions leaving the countryside (smart phones in hand) to find their dreams in Shanghai, in Mumbai, in Sao Paulo, in Nairobi, to the young technocratic of Palo Alto, of Manhattan, of Santa Monica, of Moscow, the youth like Renée Zellweger’s unforgettable character in the movie Jerry Maguire, are not so much looking for jobs as they are looking to be inspired.
And that inspiration, and it is a credit to their more open-minded than ever parents, is found in BOTH making a difference AND making a buck (and/or a rupee or a ruble).
Anti - business do-gooders they are surely not, but nor are they faceless and dreamless company men. Rather, their spirit is raised by big ideas.
By clean energy for all. By friendship and professional networks not limited by nationality, race, and creed.
By eliminating hunger in the world not via charity but via a combination of venture philanthropy, technology, and always - on global communication and awareness.
By healthcare breakthroughs of all types - diagnostic, prescriptive, and in cost and efficiency so that everyone gets great care when and where they need it.
And it will be the young and the young at heart that will move all of the above and more from dream to reality.
Not all of it in 2011 and not without setbacks and heartaches along the way.
But a lot of it.
This will be the REAL story of 2011 - listen closely and you too will hear the thumping, pulsing heart of a new economy.
Beat along with it, and 2011 will be the best year of all of our lives!
Looking for Opportunities Now?
Each year, Growthink reviews hundreds of startup and emerging company opportunities and selects those with the best management teams, market opportunities, and financial prospects.
To learn more about opportunities we are following now, click here.
To your success,