Three factors are contributing to the increase in the number of business. They are e-commerce and other technologies, growing diversity in entrepreneurship, and Downsizing and outsourcing.
E-Commerce and Other Technologies
E-commerce and other technologies have spawned thousands of new business ventures in recent year. The invention of faster internet connectivity and powerful online tools has resulted in a new commerce arena, faster buying/selling procedure, as well as easy to find products. An entrepreneur reach more customers, there is no theoretical geographic limitations. Low operational costs and better quality of services, no need of physical company set-ups. Customers can easily select products from different providers without moving around physically.
Growing Diversity in Entrepreneurship
Small-business growth is also being fueled by women, minorities, immigrants, and young people who alternatives to traditional employment. Women are starting small businesses for a number of reasons. Some choose to run their own companies so they can a more flexible work arrangement; other start their own business because of barriers to corporate advancement. Moreover, businesses owned by women are increasing both revenue and employment faster than national average.
Downsizing and Outsourcing
Contrary to popular wisdom, business start-ups often soar when the economy sours. During hard times, many companies downsize or layoff talented employees, who then have little to lose by pursuing self-employment.
To mark up for layoffs of permanent staff, some companies use outsourcing, the subcontracting of special projects and secondary business functions to experts outside the organization. Others turn to outsourcing as a way to permanently eliminate entire company department. Regardless of the reason, the increased use of outsourcing provides opportunities for smaller businesses to service the needs of larger enterprises.