Marketplace Analysis
And
Trend Tracking

1. What is a Market Place Analysis?

· In its simplest terms, analysis of the marketplace is observation of what is happening in the world around you: in the industries in your area, in the industry you are in and in the local marketplace that you experience everyday. It is founded on the basic premise that the economy and the local market place is constantly changing, constantly shifting, and with this changing and shifting new needs, new wants and new desires are constantly arising that offer product and service niches which can serve as "TARGETS OF OPPORTUNITY" for new business start-ups.

Why does this shifting and constant change take place in an economy? The market place is never the same from one day to the next. People are born. People die. People move into the area, and people move out. New products and procedures are developed that offer new opportunities and create new wants, needs and desires.

These shifts can be as dramatic as a new factory is recruited into your area which offers employment opportunity to hundreds which effects the economy on a large scale or it can be as small as one person retiring or being replaced by another. An example of how the latter might effect someone's economy would be the example of an office supply salesman who has for years has called on one secretary or purchasing agent in a company. The salesman has invested a great deal of time and money in educating the customer on the advantages and benefits of his product line and has cultivated a personal relationship with the customer. One day he arrives at the customer's office for what he believes will be a routine sales call only to find out that the individual he has been working closely with for some time has been fired, promoted, transferred or whatever. Instead, he is now faced with dealing with a total stranger who has never heard of him and has no idea what he has to offer. In essence, the salesman is back to square one and has to cultivate the relationship all over again.

Change happens! Get over it. If you face change with the mind set of an entrepreneur, you will look on change with a whole new mind set.

This may be a good time to examine what an entrepreneur is and why we feel entrepreneurism is so important. There are many definitions of an entrepreneur. Some feel that an entrepreneur is one who undertakes the starting and conducting a business or enterprise or one who accepts the risk of starting, owning and running a new business. Unfortunately, these classical definitions are lacking somewhat. All of these definitions fit all business owners, but not all business owners are entrepreneurial in their outlook or practices.

An entrepreneur is more. Try out this definition: One who SHIFTS economic resources out of an area of LOW PRODUCTIVITY to an area of HIGH PRODUCTIVITY for GREATER YIELD.

Entrepreneurs innovate. They recognize wealth-producing potential of EXISTING resources. An entrepreneur sees change as healthy and normal. He is always searching, responds to change and He exploits change as an opportunity.

In essence, an entrepreneur innovates. Innovation is the act of introducing something new. Can be a new process, product, service or it can be new method of distribution of product or service. It is not necessarily high - tech or "black box." Innovation consists of the purposeful, organized search for change and the analysis of opportunities that such change offers.

The good new is that innovation can be learned. You can and must teach yourself to observe what is happening in the marketplace. You can and must teach yourself to analyze the changes you find. And you must learn to recognize the opportunity change offers for new business starts or economic gain.

Systematic innovation is learning to recognize when change offers a MARKET GAP, a target of opportunity. It can be a product or service niche upon which you may enter the marketplace with a reasonable degree of successful expectation i.e.: a marketable idea.

With these definitions, It is simple to determine which of the characters in this cartoon is the entrepreneur and which is the business man.

Now for a word of caution before we proceed. It is essential to remember that to be successful in the marketplace, a business possesses three key elements:

1. A marketable idea.

2. Managerial skills.

3. Capital.

These are listed in order of importance. The SBA claims that the 80% mortality rate of new businesses is primarily caused by lack of capital. More recent studies suggest that almost half of the new business failures were in businesses that should have never been started in the first place. By that we mean either they lacked a truly marketable idea (one which someone you are able to reach is both able willing to pay for your goods or service) or the market niche was already filled to capacity. (does the world really need or want another video rental store?)

 So, the problem becomes how to recognize these opportunities when they arise. The best way to do this is with case studies. We will discuss four sources or indicators of possible niches, then we will look at the possibilities that watching market place trends can present. The four market place indicators we will discuss are:

· 1. Unexpected success or failure.

2. Innovation based on process needs.

3. Changes in industry or market structure.

4. Demographic changes.

1. Unexpected Success or Failure.

· Usually unforeseen and often not reported. Traditional corporate management structure frequently does not know how to handle this situation. Because it doesn't fit into accepted pattern therefore ignored or treated as a problem rather than opportunity.

 Ray Crock started in business as a salesman. In the early 1950's he was employed by the Multi-Mixer Corporation. Their primary product was a line of milk shake blending machines used at soda fountains in drug stores and five-and-dimes. They had three models: a single spindle, a three-spindle and a six-spindle. Ray's territory was the entire area west of the Mississippi which at first may seem like a large area and indeed had a lot of drug stores and five and dimes with soda fountains, but when one considers the quality of the product and the fact that each of the potential customers rarely needed more than one machine, it took a large territory to support a salesman.

This made the order he received from a small restaurant in California all the more amazing. The order was for six of the six-spindle models. Ray took the order and congratulated himself on the largest single order he had made. But his curiosity was aroused. He had never seen a restaurant which needed to make 36 milk shakes at a time. Instead of celebrating by going out to dinner, Ray took the next train to California.

What he found was a drive-in hamburger restaurant like he had never seen before. The McDonald brothers had done away with the traditional car hops and had a very limited menu: hamburgers, fries, cokes and shakes. They also had customers standing in line buying the products as fast as they could be made. The place was a gold mine and Ray saw an opportunity.

For the next year, Ray begged the McDonald brothers to expand their operations and open more restaurants. Ray's motives were clear: he could make a lot of money selling these folks six machines for each restaurant they opened. The brothers refused, being quite satisfied with their single restaurant. Ray began to realize the potential was greater than just selling milk shake mixers and offered to buy the concept from the McDonald's. A deal was struck and McDonald's Restaurant chain was born.

Premise:

Has there been an unexpected or unforeseen change in the business? Has there been an unexpectedly large order or have sales generally been unexpectedly good (or bad)? Investigating the change could lead to an opportunity that has been overlooked that could be exploited.

2. Innovation based on process need.

· This is usually task focused and you have all experienced it firsthand. How many times have you been doing something and said to yourself "I wish someone would make a so-and-so that would make this easier to do." In other words, there has to be a better way!

Lets look at the process of simply passing important information on to others. The simplest way, of course, is to just tell someone. But what if that someone isn't there at the moment? I can easily imagine this is why the cavemen started painting hunting scenes on the walls to let others know that there was good hunting down by the lake.

Unfortunately cave walls are a pretty impractical way of getting the word out. Especially if you wanted to take the record of the hunt with you. There had to be a better way. Well, how about sun dried clay tablets? Easier to carry, but better not drop them. There has to be a better wayY.how about taking reeds and making papyrus? Works wellY.easy to carry, light weightYbut where do you get papyrus if you aren't in Egypt? Has to be a better wayYhow about parchment made from the shins of sheepYeveryone had sheep.

This worked well. But there had to be a better wayYsomewhere along the line the Chinese (who else?) invented real paper. Lightweight, relatively cheap, easier on the sheep.

Now we have the problem of letting more than one person know the words of wisdom that you wish to impart. The first one was simpleYyou sat down and wrote it out. This is good until someone else wants a copy. That was a tedious job. Someone had to hand copy it. There has to be a better way.

Along comes Gothenburg. Now we all learned in grade school that Gothenburg invented the printing press. Well, this is one of the pieces of misinformation that we now have to unlearn. The printing press was invented about 1500 years before Herr Gothenburg by the Chinese and was in use in Europe for several hundred years in one form or another before Gothenburg, but it wasn't used for printing anything on paper. It was used to print designs on cloth with dye ( hence, cloth with a design pattern not woven into it is called a print).

What Gothenburg did develop was a system on movable, reusable typeface that one could use on a printing press to apply ink to paper. Wow, now one could make copy after copy of whatever it was they wanted to say. And it was fast except for one flaw in the design. Once the type was set up you could make as many copies as you wantedYbut if you needed a new page of information you had to take the type out of the tray and sort it letter by letter and "re-set" the type, all by hand. From the time of Gothenburg until the 1880's, this was a major hurdle in the development of printing. The presses themselves went from being hand operated, producing a few pages a minute, to machines that could produce many hundreds of pages a minuteYbut each page had to be set by handY.there has to be a better way.

In the 1880's a new machine was developed that solved the problem which was called a linotype. Basically it looks like an overgrown typewriter with a furnace in the back which melts led. As you press the keyboard, the corresponding letter is molded and set in a tray in the proper order. Big, bulky, expensive. There has to be an even better way someone who was not a printer could get the word outY.there has to be a better way.

Lets invent a typewrite! Anyone can use it. And if you want to make more than one copy, invent carbon paper. Good up to a pointY.more than just a few copies and carbon paper won't workYlets invent the mimeograph machine that lets me print several hundred copies. Then there was the Xerox machineYfinally, with the development of computers there was the development of word processing programsYand the printers developed from the old dot-matrix printers to laser printers to color paint jets and so on.

All with the same purposeYgetting the word out.

Now, we've done away with the need for even paper with the development of the World Wide Web, almost anyone can "get the word out" to the entire world if they wish. (All you have to be able to do is to find itY.hmmmYthere has to be a better way.)

The point is, there is always a better way. In this example, there were literally dozens of technological developments, but for each development, there were hundreds of companies that took advantage of them. There used to be many of brands of typewrites. There are many brands of computers, word processors and printers on the market at the moment and literally thousands of people creating wealth developing, selling and using the products

3. Change in industry or market structure.

· Here we will discuss the natural shifts in industries, distribution systems or market conditions and structure constantly lend themselves to innovative opportunity.

Example: Service Stations

Remember the pre-1973 SERVICE station? Gasoline was 30 cents a gallon, and when you drove in four people would respond. One would pump your gas, another would wash your windows, and a third would check under the hood while the fourth checked the air in your tires. When it was all over you even got a sheet of green stamps and maybe even a steak knife for allowing them to do all of that to your car.

How could they afford to do that for 30 cents a gallon? They couldn't. There was very little profit in gasoline. But there was profit in the mechanic who fixed your car as well as the tires, batteries, alignments and oil changes they sold to all those loyal customers they won over with all that friendly service. The entire industry was structured on winning people over with service at the gas pump so you would bring your car to them when it needed repair.

The oil embargo of 1973 changed everything. The price of gasoline rose 40 to 50 cents a gallon which made it profitable; people waited in line to get their gas and in some cases even pumped their own gasoline. This all led to the first radical change in the industry. Gasoline was now a profit center and people seemed willing to pump their own, so who needed all that extra labor expense? The "Self Service" gas station was created. Soon someone experimented with doing away with the garage to make more room for more pumps. Now, instead of four people coming out of the door when you drove up, you pumped the gas yourself and paid the single minimum wage clerk who was sitting in the little room all by himself doing nothing but collecting money all day.

The second big innovation was when someone decided that paying a clerk to sit around and collect gas money was under-utilizing valuable labor. They had all these customers coming in to pay the clerk, so why not provide the customers with something else to buy while they were there? With some experimentation there developed a combination of the gas station and a mini-convenience store where you can get a snack and a beer to have while you drive home.

The third innovation developed when someone noticed that there were a lot of cars going around that needed to have their oil changed. If people bothered to check their oil when they filled up their cars, the best they could do would be to add oil. The only way to change the oil was to do it yourself which most people didn't know how to do, or take your car to the dealer for service which was very time consuming, not to mention expensive. So, some innovative entrepreneur decided to try setting up a small business which did nothing but change the oil in your car and do it in 10 minutes. The result was Jiffy Lube. Other chains of specialty auto service products such as Midas Mufflers and Aamco Transmission have also expanded to fill the void left by the decline of the service station.

The fourth innovation to come from this change in the service station industry is a trend now developing around the country to group together these independent specialty auto service shops into a sort of car service strip center. Sharing a common lot, you can start at one end of the center and have your brakes serviced in one shop, your oil changed in the next, a new muffler installed in the next, and your transmission fixed in another. It appears only a matter of time before someone decides to put a gas pump in one of these centers.

Another innovation was attempted in the Southeast at the self service Gulf stations/mini-convenience stores. For an extra 50 cents a gallon, you could pull up to a full service island and someone will come out and pump your gas for you.

4. Demographic change.

· To study demographics is to study, among other things, the age, size, structure, educational level and housing patterns of a population. Study of the changes in the demographic patterns of a population can allow one to make some very accurate, very long range predictions concerning the structure and make-up of that population.

To the entrepreneur it can give some very valuable information which will reveal a number of possible opportunities.

In studying the birthrate changes, one could have made some very accurate predictions in the early 1950's concerning the make-up of the American population for the next 75 or so years.

In 1950 it should have been obvious that by 1957 there was going to be a tremendous increase in the number of classrooms, teachers, textbooks, etc. needed by the primary school systems. This wave would reach high school by 1965 and college by 1969.

This Baby Boom of the late 40's and early 50's should have alerted the astute observer that the 50's and 60's were going to be a boom time for any business that was child-related from toys to clothing to pediatricians.

The tremendous upsurge in apartment construction of the early and mid 1970's was predictable. All these kids were now moving out on their own and had to live somewhere.

In fact this wave of people will continue moving through the population with very predictable results until around the year 2025 or so. Each stage of their lives will be marked by predictable needs which offer many possible opportunities to the entrepreneur.

It is very predictable, for example, that as this population ages there will be an increase in the demand for retirement and nursing home facilities. Also in great demand will be the peripheral needs of elderly people, such as canes, walkers, wheelchairs, hearing aids and so on.

Premise:

With the aging of the population would there be opportunities in retailing, such as discount co-op clubs or other retail outlets which specialize in the needs of the elderly?

Many elderly are living with their married children because of the high cost of nursing home facilities. But with the increase of working women, these elderly are frequently left alone all day. Is there an opportunity for some type of day-care facility catering to the elderly where they could be dropped off by their working children and picked up at the end of the workday, sort of a Kindercare for grandparents?

Many elderly are quite healthy and living alone. Might there be an opportunity for a home delivery catering service which could deliver hot, well balanced meals to the elderly?

Relying on birthrates to make predictions about the future can be risky for it does not take into account economic and social changes. The number of working women is an example. No one could have predicted in 1950 that the number of working women would double by 1970 (and, if the trend continues, will double again in the next 20 years.) Never the less, this increase has led to a number of far-reaching effects, especially when coupled with the declining birthrate among the baby boomers themselves.

Trend Tracking

Governing Waves and Their Confluence

· A small library exists containing books about trends and forces shaping our future socio-economy, therefore, we will address only those forces that can be defined as fundamental and governing; those trends upon which we have no control or influence. Most trends can be affected through local or governmental actions. Only time proves whether the actions are successful. A growing crime trend is addressed by increasing the police presence and court reforms. A trend in military base closures is addressed through a variety of grants and incentives aimed at redevelopment.

Fundamental waves of change can only be understood and acted upon by planning to leverage the opportunity or counter the threat inherent in that wave. Each of these waves unto itself is a powerful force. But a merging or confluence of these waves create such an irresistible force that it must be acted upon to ride that wave, or be engulfed by it and left with only wreckage and lost opportunity in its wake.

There are six such fundamental waves coming to confluence as we enter the next century. This event will present entrepreneurs with a challenge unequaled in our generation. Some will act with traditional responses, the same responses they are comfortable with. Others will proact with the understanding that what has worked in the past will not work in the future. As always, our actions come down to individual, personal choice. Armed with knowledge and methodologies that give insight into better planning, those choices will be wiser and more successful.

Wave #1: Demographics

· Much has been made of the fact that the baby boomer generation is crossing the 50 year old plateau. Beginning in 1996, approximately 50,000 boomers per day will turn 50. This will continue until 2006. We are a nation growing older and as we do so our needs, attitudes and financial habits change. As this population group changes its mind set from daily consumption to saving for retirement, it will drive the capital and equity markets.

Many of this generation have paid for the education of their children, settled in their final home, paid off mortgages and begun to consume less of their growing disposable income. It will be shifted toward savings and investments. Those dollars consumed will be spent on travel and products and services that make life easier and more enjoyable.

This boomer front edge is also entering their most productive career years. Incomes will rise and spending patterns more in line with their status will occur.

Spending on health, well being and recreation will spark thousands of new businesses catering to these demands.

Many of this age group still have the responsibility of their children, but also will face more responsibility for their aging parents. This is called the "sandwich effect". These boomers will influence the continued growth in nursing homes and assisted living developments.

By 2015, they will begin to retire, a time when spending will be curtailed and become more conservative.

Over the next 20 years, this aging pattern will drive the demand for new products and services while pushing the capital markets to new highs.

Attitudinally, as this early boomer cohort reaches career positions in upper management, they will make the final break away of the command and control hierarchical structures of the industrial age, a pattern and attitude that will be accelerated by the following, larger boomer cohorts.

Collectively, these changes will have serious long ranging effect on our new socio-economy.

 Wave #2: Capital Formation

· As the boomers move through the save and invest period, our capital markets will reach a depth almost unheard of in modern times.

In 1995, equity mutual funds grew at $10.7 billion per month. In 1996, this sector grew by $19.2 billion per month. January, 1997 saw $29.1 billion pour into these funds. It has now settled to approximately $20 billion per month.

Bank assets are growing rapidly and consolidation of that industry will create many financial powerhouses that will drive commercial and consumer lending markets, while the surplus of funds hold interest rates in check. Americans are now saving at a rate of 4.5% of disposable income, and increasing by % per year. Our venture capital pool has grown to over $37 billion, managed by over 700 venture capital firms.

Total funds in retirement accounts stand now at $3 trillion and will grow to over $5 trillion by 2001. Add to this the over $1 trillion that will be passed back to inheritors from expiring relatives by the year 2000.

Individually, each of these trends will make a powerful impact on our economy, while collectively, the effect could be astounding.

This wave of capital will drive the stock market, fill the banks and insurance companies coffers, and provide the investment capital for the coming entrepreneurial explosion. An important effect will be to lessen our nation's dependence on foreign capital and remove much of the threat of foreign repatriation of the U.S. investments. As the capital pool masses, and equity markets mushroom, the cost of capital will remain in check, thus improving corporate profitability and therefore, federal tax revenues. It is within our reach to totally eliminate the federal deficit and free up trillions of dollars currently being consumed by interest on debt.

A major impact of this dramatic capital formation wave will be the growth of jobs created in financial planning, money management, financial information, technology to support these jobs, plus the new ventures financed by this investment pool. We, indeed, will have the opportunity to launch thousands of new businesses and create hundreds of thousands of new jobs.

Wave #3: New Organizational Structure

· There are those who argue that the plateauing of the American economy during the 70's and 80's is not cyclical, but is structural and possibly permanent. They point to slowing G.D.P. growth and the 50% decline in annual productivity rates as proof that our problems are endemic.

We now begin to see that those arguments do not hold up to the American entrepreneurial ethic or to our inherent advantage of an innovative culture capable of adapting to bad situations.

As the pain of downsizing and time consuming redeployment of our workforce and resources begins to recede, we not only have proven the naysayers wrong (G.D.P. grew at 5.9% in the first quarter of 1997), but the debate has now shifted to how we must hold our economy back to prevent overheating and the potential spike of inflation that once came with rapid economic growth. The dramatic results of our economic performance since the recession of 1991 is only a prelude to the decade of pure possibility yet to come.

Much of the credit for the performance thus far is due to a change in organizational structures now widely embraced by our fastest growing corporations.

During the past industrial period of large, vertically integrated companies with deep hierarchical structures, the movement of knowledge, information, power and promotions was also vertical. It moved elevator style, up and down, usually top down.

The boomers brought a new attitude to enterprise management. They promoted the concept of flat organizational charts, moving knowledge and information access in all directions. They embraced open book management styles wherein workers were taught how these functions affect profitability. They have become both stockholders and stake holders in their firms successful growth.

The Dow Jones Average, the NASDAQ, the Fortune 500, and the Inc. 500 are strongly influenced by firms that practice this rapidly growing attitude of organizational structure. Many of these firms did not exist 20 years ago. We are seeing the emergence of a corporate structure that will grow to dominance over the next 20 years as the boomers move into upper management and as the next entrepreneurial explosion occurs during the decade of pure possibility.

This new open, flexible structural paradigm has also affected the way companies ally themselves to rapidly adapt to market opportunities and threats. Our new structure allows firms to collaborate up and down the value chain to produce products more rapidly. Outsourcing allows each business to focus on core competencies and new product innovation. Total communication up and down the value chain holds down costs, reduces inventories, and allows innovative methodologies to be shared instantly.

Manufacturing productivity is rising dramatically and the ability to move rapidly has allowed American corporations to regain the top positions in global markets. This new ethic of cooperation and linkages between businesses will carry over to other areas of our lives. Economic development will become a collaborative effort practiced on a regional basis and thus will occur our new growth regions, regions where industries will cluster to gain the advantages of shared knowledge and methodologies, shared information and infrastructure resources.

More and more publications are turning attention to this concept of regional economic agglomeration and clustering. We now realize that such disciplines are an outgrowth of our new attitude toward business organizational structures and the emerging ability and willingness to share knowledge and information and to create value by sharing and leveraging resources.

Wave #4: Boomer Spending Cycles

· America is a nation of consumers. When it comes to consumption, numbers count. It is projected that by 2040, China will be the largest economy in the world. It will not be their industrial prowess that causes this event. It will be their sheer number of consumers. How does this fact relate to America? Numbers count.

We know that 66% of our G.D.P. is attributable to consumer spending, that 14% of G.D.P. is corporate response to consumer demand (the 20% balance is governmental spending). So consumption sets the stage of economic growth and numbers of consumers count. A correlation to this is when consumers spend. Look at these facts:

1	Households aged 45-53 are the biggest spenders, averaging $44,400/yr., 31% more than the average household.
2	Our highest consumption years are between age 40-49 when we trade up to larger homes and educate our children. This early spending growth begins at about age 36.
3	Between 1996 and the year 2000, there will be 82 million consumers between ages 36-54.
4	People between age 35-54 have the lowest unemployment rate, only 4%.
5	The median age of the boomers in 1996 is 40 years old.
6	Households between ages 35 and 54 are 70% two income families. By 2010, this group will increase by 30%.
7	Spending on our children dominates our consumption patterns. Boomers are parents of 75% of children under age 18.

· What do all of these facts tell us? Simply that our largest demographic group will pass through their peak spending years between now and 2010.

With consumption's influence on economic growth, we can safely conclude that our nation potentially stands before its greatest economic growth period, a decade of pure economic possibility.

This growth in demand will offer us an entrepreneurial opportunity rarely seen. There will never be a better time to launch a business in the U.S. than during the coming decade. The demand will be in growth mode, the investment capital to finance young companies will be available and the new organizational structure offer entry points all along the value chain.

Wave # 5: Technology "S" Curves

· Each generation innovates its own technology. The generation of the industrial era harnessed electricity to industrial and residential environments to grow massive industries based on consumer goods and appliances. They brought television into every home to entertain, inform and to sell products. They brought telephones into every home and office to give us rapid communication. They grew aviation industries that gave us the capacity to travel and move products around the globe. They built the auto industries and the interstate system to allow us to commute from the suburbs and across our nation at will.

 In effect, the industrial era was about perfecting and applying their technologies, which in turn gave us economic growth and productivity gains which provided incomes that in turn drove consumption.

We are now at the point where the technology of the boomer generation will do the same thing. The digital, fiber optic and wireless technologies will converge and as applications increase, the outcome will again be economic growth.

The leading cohort of a generation innovates new technologies. The following cohorts apply those technologies and bring those products into the mainstream, creating large, new industries.

As these technology based products and services move up the "S" curve of consumption, market penetration growth occurs. It is that stage between 10% and 90% of market absorption that the most profitable growth occurs.

What may be surmised about the potential for growth in boomer technological-based products? Here are some facts:

1	Personal computers have yet to reach 40% of the household market. In 1994 computers out-sold T.V.'s
2	Cellular phones are used by 45 million customers, yet this is less than 30% absorption
3	Video conferencing is still in its infancy.
4	On-line service and Internet commerce is growing rapidly, but is still in its very early stages.
5	Portable computers have only reached 30% market penetration.
6	Worldwide consumption of personal computers is less than 20%.

· Taken collectively, these trends begin to define the coming growth of boomer technology- based products and services. Industries serving this sector will grow dramatically, but it is in the use and application of this technology which holds the greatest potential for productivity gains. It is through the resurgence of productivity that business and personal profit will occur. We are on the doorstep of that event.

The use and application of boomer technology has already had an effect on how we work. Every business now has the means to create intranets that can connect every employee to the information and collegial input they need to do their work faster, better and more profitably.

Telecommuting is growing rapidly. 18% of our workforce now do job related tasks from home. It is estimated that 10 million home-based businesses now exist and the number will grow faster as the cost of technology continues to fall and as the power of technology continues to rise. Location is becoming less of a factor in where people have to work. The ability to work from home (and still attend to family matters) is one of the major factors in the growth of women-owned businesses. 32.2% of our 8.8 million self-employed workers are women. 25% of our workforce is in companies created by women. Women-owned businesses is one of our fastest growing entrepreneurial trends.

The growing ability to work anywhere, made possible by the boomer technology "S" curve growth and application gives everyone the ability to earn more, be more productive and still control more flexibility in their lifestyle.

Outsourcing non-core functions has created thousands of new businesses, new jobs and wider access to income opportunities. Most of this is a payoff of technology application and absorption patterns.

Training and education will be a primary beneficiary of technology application. As the need for workforce retraining grows, coupled with the continuing increase in educational expense, it will be the entrepreneurial institutional leaders who will devise and disseminate new digital-based educational and training products in a very cost effective mode.

In summary, the spread and application of boomer technology offers us a productivity dividend that could well democratize wealth and close the wage and income gaps that so dominate national debate. Coupled with low unemployment and a labor pool that will only grow at 1%/year over the next decade, the opportunity exists for everyone willing to train and work to achieve a good wage and improving standard of living. Through productivity gains of technology application, it can occur without pushing inflation too high, or eroding corporate earnings.

Wave #6: The Fifth Migration

· Americans are a mobile breed. This is illustrated by the fact that we have had four major re-disbursement of our population during our brief history. The first migration was north and south along the Atlantic seaboard. Next, we breached the mountains and populated the Ohio and Mississippi River Valleys. Our third migration occurred when our industrial growth brought waves of people from the farm to our large cities to work in our factories. As our middle income sector grew and could buy automobiles, we migrated to the suburbs, our fourth migration. The fifth migration from the metro centers and highly impacted suburbs to the exurbs (or penturbs) is now underway.

Technology application and the new organizational structure combined with the fifth migration wave will give rise to the new economic industrial/enterprise clusters and the growth regions of the future.

As the means to work remotely from the central office and as self-employment and home- based business sectors grow, we will find economic activity re-massing in these new growth regions.

Generally speaking, the new growth regions will occur within 90 miles of a metro area, within a hour's drive of an airport with scheduled commercial service, and near universities. These new regions will be characterized by high quality of life, a reasonable cost of living and accessibility to recreational, cultural and medical services. Amenities such as live sports events, fiber optics, technology services, bookstores, libraries and such will also be important, as will interstate access.

Penturbian towns that contain this bundle of benefits will have a short term advantage in attracting newcomers and mobile entrepreneurs. But, the potential for communities with some of these features to assemble others is certainly within the capability of many American municipalities.

In 1968, it was calculated that 50% of Americans lived in suburban areas. Many commuted to the metro center to work. It appears that Suburbia peaked at that time and has been losing residents (as a percentage of total population) since that time.

As the suburbs began to exhibit the problems of its metro center, they began to out-migrate people. Density, pollution, traffic, rising cost of living, crime, overcrowded schools, rising property and sales taxes were the reasons people abandoned the metros. Now they find the same situation has followed them to the suburbs, so the inclination to relocate to quieter, more appealing towns is growing.

Currently 43% of rural growth is due to in-migration. This will continue until about 2015 when the penturbs will peak. It is projected that 60 million people will relocate to the penturbs. During this 18-20 year period we will see new growth regions rise and with it, new economic activity.

The Wave Confluence

· With this brief description of the six fundamental waves, we can look now to the decade of pure possibility with the benefit of informed perspective. As these waves merge into confluence what might be the economic outcomes we anticipate? The following charts outline several possible scenarios and illustrate the possible outcomes.

Summary

1. You can never stop learning.

2. Add skills at least annually, not just skills that apply directly to your present job.

3. Take a Scholars approach to learning:

· On line curriculums

Professional Journals

Primary Resources

4. Develop ASoft Skills@

· Team Work

Problem Solving

Innovative Solutions

5. Watch the trends that will reshape your Socio-Economy.

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