Missouri Small Business and Technology Development Centers Blog

IBIS World, a terrific source for industry and market research, has just released its list of the top five industries to watch for business opportunities in the next five years. After analyzing 700 industry sectors for financial performance, growth trends and profitability, the following are the ones the researchers believe are best positioned to grow into this decade:

With the drive to extend broadband access to every part of the country still lacking the technology and with the continuing growth in the wireless market, the need for technological innovations continues to increase. This might take the form of new company formation focused on creating the new technology, or it may take the form of supplying technology support to other firms. Either way, there is rich opportunity for those who would consider IT support and consulting, fulfillment, data mining, online payment processing and lead generation. (more…)

There are not too many recession-proof industries, but thanks to folks like me, the pet-related businesses are doing just fine, even now.

The only slight difference from previous years is that those of us who are willing to spend generously on our pets are a bit more value-conscious than before. I have found myself comparing prices among vitamins and shampoos, something I didn’t do historically.

We are continuing to buy over-the-counter medications to the tune of $10 billion annually. And when we buy necessities, we’re buying on the higher end — designer collars and leashes, bowls and bedding. We spend about $4 billion a year on services, such as grooming. The business of doggie day care continues to be profitable, and more boarding and exercise facilities are springing up all the time.

The ultimate security for pet lovers — pet insurance — is about a $400 million a year industry. Investors are fairly interested in pet insurance businesses, as the growth expected in this industry as the economy improves should be exponential.

One phenomenon I have noticed is how many large retailers such as Wal-Mart and Target are getting into the pet industry space, expanding their pet supply sections, adding more so-called designer products and enlarging their pet food areas, carrying more higher-end brands. At the same time, online pet supply retailers are expanding as well. Social media is driving a great deal of this growth, and many suppliers are offering low-cost pharmaceuticals and holistic pet care items. Even the massive WebMD is entering the pet health space, expanding its online resources for pet owners.

In our community, the large pet supply retailers such as Petco and Petsmart have put an end to all but two of our locally owned, pet supply small businesses, a trend that we are seeing nationally as well.

The December 2009 edition of Entrepreneur Magazine identified “Green Power” as one of the top 10 small business sectors continuing to thrive even in these recessionary times. It’s predicted to become an even larger phenomenon in the future.

Clean energy is called “the challenge of our generation” by industry observers. Many believe it’s better characterized as “the opportunity of our generation.” The momentum about the possibilities in this industry is growing so rapidly that MIT recently launched a professional development opportunity entitled Clean Energy Ventures: Creating Innovative New Businesses through Entrepreneurial Management.

It appears that doing something good for the environment can also mean doing something good for the economy — job and business creation.

Other countries are stepping out strongly in this arena. For instance, China’s richest woman, the owner of Nine Dragons Paper in China’s Guandong Providence, made her estimated $3 billion fortune by recycling scrap paper imported from the U.S. Other entrepreneurs are turning waste into feedstock or deploying small scale solar or renewable energy technologies at the village level.

There has been a lot of focus on how green jobs will play an important role as we exit the recession. But one of the most promising is for those who create their own job — the green entrepreneurs. They may approach it one of two ways. They may take an existing industry and reform that industry into a green one. Or, they may develop their own business based on a new technology, service or produce. Both strategies are important and job-creating. There is definitely promise in this area. Many ideas remain undiscovered. The green industry is expected to top out at $1.5 trillion within the next decade.

One of the key opportunities is making the town/gown connections between universities, communities and entrepreneurs as solid as possible. We need to ensure that researchers are getting their green technologies off the laboratory shelves and out to the marketplace, and we need to ensure that entrepreneurs and communities are capitalizing on the wealth of knowledge within university walls when they seek to solve renewable energy or other “green” challenges.

In the end, it will take systematic implementation of technological processes, and not just invention add-ons to existing systems. After all, Thomas Edison didn’t just invent the light bulb, and try to plug it into kerosene lamps. He piloted an entire electrical system on Wall Street before taking it out into the community. And Henry Ford didn’t just invent the internal combustion engine. He created the entire automobile factory system to support the introduction of that innovation into the horse and buggy economy of his day.

Greening our world requires not only the technology, but a new business model, a market adoption strategy and government policies that support the transition.

I get some interesting information from time to time from a variety of consumer behavior websites and demographic resources. Here are some interesting recent findings:

• Percent change in average household spending on cable service, 2000 to 2006, after adjusting for inflation: +43.
• Percentage of American women who pray at least once a day: 68.
• Percentage of men who favor requiring a police permit before a person can buy a gun: 73.
• Householders aged 55 to 64 spend 25 percent more than the average household on women’s shoes, more than any other age group.

Whenever I tell folks that our center is located in the MU College of Engineering, I get some quizzical looks in return.

“The College of Engineering? What are you doing there?”

It’s a logical question, especially from individuals who are unfamiliar with engineering or entrepreneurship. But the explanation is just as logical.

The first connection is in the mindset of the two disciplines. It’s a mindset that we’ve discussed in this column before. Both entrepreneurs and engineers are known for their problem-solving ability. Both are “idea people.” These are the folks who want to make things better, faster, stronger, more efficient, easier, more environmentally friendly, less expensive, more value-added”the list goes on and on. They are the “what if?” people. And thank goodness we have them, or we would be missing out on nearly all of the products we enjoy today. (Just stop and think of everything you have used today that required the work of an engineer, from the alarm that woke you up, to the air conditioning you will sleep under tonight. You’ll be amazed.)

This natural connection is behind a national movement to educate more engineers with an entrepreneurial mindset, professionals who possess not only solid technical expertise, but also the additional qualities of inventiveness, risk-taking, opportunity identification and a sense of adventure. This is a change in engineering education, and it’s a far cry from the preparation enjoyed by the engineers of the Cold War era, who were immersed in a narrow technical discipline, with the anticipation that they would work their entire career for a manufacturing concern, often of a defense-related nature. In a primarily product-oriented economy, the work of engineers was more narrowly focused, related to specific projects within a large corporate engine. (more…)