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It’s high time to re-imagine how and where we work

By Matthew Bauer

As originally in the May/June Sustainable Industries Issue, Bridging a Digital Divide

If you have been following the news as of late, it is likely that you have seen one or more articles on the virtues or the downside of telework, all taking cues from Yahoo!’s (Nasdaq:  YHOO) recent decision to recall its teleworkers back to the “factory.” The debate has covered the pros and cons extensively, so I will spare you the emotion here and focus on the past, present and future of work as we know it, and where it’s going, whether you like it or not. Just the facts ma’am!

First, I would like to thank Yahoo! CEO Marissa Mayer for sparking the debate, which was probably not her intention.  How we work has been a long overdue national discussion. As with most things (i.e. religion, politics, sports), there is no clear right or wrong answer in this debate; maybe all the articles and commentary should have lead off with a disclaimer as such. In Yahoo!’s case, it was not telework, but rather a decline in company culture and inability to measure how or what work was actually getting done, that sparked the announcement. Yahoo! is circling the wagons and starting over, which is what Mayer was brought there to do. Good on you.

Let’s kick off our installment in this worthwhile debate with a look back, way back: For most of recorded history, the nature of work has been a real slog for the masses. Transitions from hunting and gathering all day to feed ourselves (95% of our species’ history) to agriculture, servitude, feudal existence, the manual labor of it all – advances were at a snail’s pace. In a relatively small sliver of time, really just a few hundred years, the acceleration has been almost dizzying: the Industrial Age, globalization, computers, the Internet, and instantaneous global media coverage. Transitions that used to be measured in decades and centuries now take months and a few years

At the same time, the Industrial Age has been fading into the new realities of a service-based economy – an economy based on knowledge workers, and an economy where location is becoming less and less a factor. A funny thing happened on the way to the water cooler during the transition, though: most workers have kept on reporting to the “factory” for work. The nature of the work really has little or nothing to do with the place we actually perform that work. With all this technology in the ground and in the air, we have lawyers, accountants, consultants, nonprofit staff, government workers, lobbyists, tech support, software engineers, customer support, administrative workers, who predomnantly still drive, train and fly to the “factory” most days. Twenty years ago, this made sense. We didn’t have the public Internet, processes, automation and the playing field for knowledge workers to really thrive. Now?

Fast forward to 2013. What an amazing opportunity! For the first time in history, one can make a good living from most any home or office in America, most likely with a great deal of flexibility and greater lifestyle than ever before enjoyed in history. As foretold decades ago by Peter Drucker, the age of the knowledge worker is upon us. However, collectively we are doing very little to connect the dots and bring the untold benefits of remote work into the fold. Whether remote means five miles or 5,000 miles to a worker, the experiment is over. Examples such as IBM (NY SE: IBM), the U.S. Trade and Patent Office, U.S. Army, and our own little beauty, BetterWorld Telecom, all rely on telework and remote work as a backbone of their operations – seeking and utilizing the best talent available, regardless of location. The opportunity of this generation lies in the social and environmental benefits, cost savings and leadership our country can provide the world by creating a national movement around a #workshift.

Location-based work is a dinosaur awaiting extinction. The two largest contributors to America’s carbon emissions are buildings and transportation.  Commuting to office buildings makes up most of that number. In sum, the leading contributor to carbon and environmental emissions in the United States is squarely rooted in how we work. Roughly 5% of the U.S. workforce telecommutes most days. If that number was 50% of those able to telecommute, we could cut our carbon emissions by 50%, while saving 453 million barrels of oil and slashing the 2.1 billion hours we waste in traffic jams every year (Source: “From Workplace to Anyplace,” World Wildlife Fund). It would be the equivalent of taking 15 million cars off the road. Add in health costs, traffic deaths and injuries and lost productivity and it doesn’t take a genius to realize our current version of work is in need of a reboot. As Kirkpatrick Sale wrote in “Human Scale” more than 33 years ago,“…the madness of American transportation leads to only one conclusion: no solution of the transportation puzzle is possible until work and home are put back together.”

On the social side of the equation the benefits pile up even higher. Companies that have effectively embraced telework tend to be more open and democratic by nature, which is a starting point for greater productivity and the evolution towards a more responsible, sustainable business framework. It’s also a reflection of company values in being results-oriented, regardless of when and how employees work, versus being hyper-controlling with a clock-watching mentality. It’s about employee trust and empowerment, expanding opportunities for those with geographic and physical challenges.  We are headed in a new direction whether managers of traditional work models like it or not. Telework is starting to scale up significantly. It’s seen 15% growth since 1990 and is expected to impact 50% of the workforce by 2020 (Source: “Remote Work,” Cornell University, 2011). In addition, 36% of employers planned to hire contract workers in 2012, up from 28% in 2009 (Source: CareerBuilder.com). More than 4 million jobs are available today while 12 million people are unemployed (Source: “With Positions to Fill, Employers Wait for Perfection,” New York Times, March 6, 2013). And don’t forget those Millennials, who, on the whole, are seeking alternative work environments and will break the mold that has been dominant for decades.

Work is consistently dividing into smaller pieces, placing increased reliance on knowledge workers to fill in the gaps as contractors rather than full-time employees. “In the future, it will make more sense to work on a project-by-project basis, similar to how crews work on movies…and then, upon completion of the project, go their separate ways,” write Mayard Webb in “Rebooting Work.” Contract work tends to be done remotely. Contract work also doesn’t count in unemployment numbers published by the U.S. Bureau of Labor. With unemployment stagnant and contract work rising, we should be rethinking how we measure what constitutes a job.

However, there remains a “digital divide” – a giant chasm where so much opportunity is missed by those lacking access to state-of-the-art telework technologies. The greatest opportunity we have today to lower unemployment and build permanent social change is to bridge this gap and create a knowledge-based work force. Many countries around the world have pursued this strategy, lifting millions of people out of poverty and providing longterm sustainable careers. With ongoing “broadband-to-work” training programs, they are focused on readying their citizens for the New Economy. It’s a model we must adapt to ensure the sustainability and growth of the U.S. economy.

At the core of the new knowledge-worker paradigm is the removal of location from the equation. From the supply side, this opens the door to all of those rapped in “job deserts” – from the single mother in downtown Detroit and the struggling family in rural Oklahoma to the nearly 20 million U.S. citizens with physical disabilities that make it difficult to get to and from the factory.

The big idea here is related to how Western society and much of the world has organized its work, schooling, government and other institutions in paternal, top-down fashion, packed with hierarchy and an implicit value on location. Cracks have begun to appear around how these relationships are transacted, and with new and emerging technologies, anchoring to a specific location makes less and less sense. A teacher standing in front of a classroom, a CEO pacing in a boardroom, the congresswoman speaking to the House chamber – with 6.2 billion cell phones now in service and hundreds of millions with Internet access, opportunity is blossoming for a truly connected “biosphere consciousness” as Jeremy Rifkin describes it. All this happened in the last 20 years. Looking at the next 20 more years, it’s going to get real interesting. Maybe this connectedness also offers a return to a more direct and organic way of growing, connecting and existing on this planet.

The current mode of work we find ourselves rooted in is just not tenable for the long term. It’s too expensive and unproductive. It’s our greatest source of pollution. It excludes so many potentially productive people who are relegated to local or regional options beneath their capabilities. We have proven, effective models and the technology to break the mold for good. Let’s enable this inevitable transition take hold sooner than later, and let’s reinvent America by re-imagining how and where we work. With heavy economic challenges facing the majority of Americans, there’s no reason to wait.

BetterWorld was out making change with fellow local businesses at this year’s BALLE (Business Alliance for Local Living Economies) conference in Grand Rapids, Michigan. The 2012 BALLE Business Conference: Real Prosperity Starts Here conference connected more than 700 community innovators, business owners, and investors to people, resources and ideas to unleash local prosperity.

BetterWorld President Matt Bauer stopped off to speak with Rob Trube of BizWestMichigan and talk a little about BetterWorld, B Corps, Worldblu, and BetterWork™.

BizWestMichigan Interview at BALLE 2012

Business and commutes are at a standstill today after an extreme fire in West Oakland put the BART (Bay Area Rapid Transit) system completely out of service between the East Bay and San Francisco. The resultant traffic and chaos from commuters attempting alternate methods of ferry, buses, and carpooling will likely result in something of a local holiday - as highways turn into parking lots. The growing density of the Bay Area and many urban corridors, puts individuals and businesses at the mercy of transit systems that are both fallible and already pushed to capacity.

If your business has flexible work systems in place, then a “carpocalyse” such as this won’t have nearly the destructive impact that it otherwise could on your team’s productivity. Creating company policy that effectively utilizes remote work and harnesses communication technology is a matter of resiliency and adaptation, not a radical leap or indulgent management style. The future of work requires this shift in managerial and company mindset. Despite the fact that many knowledge workers could efficiently and effectively do their work from home, most businesses default to a management and evaluation style designed for factory workers. It’s time for policy to match reality, we need to work more intelligently - for our health, productivity and transportation sanity.

But maybe you’re not convinced.  What does remote work look like exactly? What about the needs to have a home office, the benefits of face-to-face, the prestige of a nice office and coffee chat time? The reality is that shifting to a more flexible, remote work model with your organization is likely going to be a bit like a new exercise routine. The best tactic is to start small and build up a system that is tested and optimal for your team, activity, and industry. Obviously not all jobs can be done effectively in a remote work framework. The end game is not a one-size-fits-all solution, it is more about facing the reality that without this flexibility, your business and team are vulnerable to disasters like this morning’s commute on the Bay Bridge.

Here at BetterWorld, we’ve created a framework for working more effectively, called BetterWork (TM). The BetterWork whitepaper is the findings from a nine-month study at Bainbridge Graduate Institute on the impact of virtualization of communications infrastructure and remote work.

There’s also a large library of useful links on remote and flexible work in our Delicious link library. The majority of academic research in this area has been funded or motivated by transportation improvement efforts. But the benefits for companies and workers extend far beyond decreasing wasted hours spent sitting in traffic. Satisfaction, productivity, loyalty, in study upon study, all of these measures improve with a flexible work environment. For optimal productivity and company resiliency, flexible work needs to be taken seriously. This effort needs to be moved out of the category of traffic mitigation and into the spotlight as the key to our future - evolving our workplace frameworks  to catch up with the reality of this modern world.

What steps can you take to build a resilient organization? Are you prepared for a bridge closure, severe weather or public transit failure? The successful companies and organizations of tomorrow will be the ones who implement resilient, flexible work structures today.

As originally featured in SustainableIndustries.com by BetterWorld President Matthew Bauer. A three part series: Reading the tea leaves, accepting the inevitable and bringing focus to the most promising sector of our economy. Part One discussed how we got to where we are. Part Two focused on Trends and Facts helping support the shift to a small business-focused economy, Part Three now pulls it all together and discusses concrete solutions for moving forward into the new Access Economy.

All too often we are just looking at the issues in silos and not seeing the opportunity for truly shifting our economy, society and our species’ detrimental and growing impact on the earth’s biosphere. Taking a page from the wisdom of E.O. Wilson, his book, Conscilience, touches brilliantly on a new approach - managing strategy and policy across multiple silos of specialty at the same time.

As both large companies and governments are shrinking their employee rolls, it seems as though the facts and trends we discussed in the second part of this series, combined with a huge focus on strengthening, teaching and supporting smaller, independent, innovative businesses, will reap the greatest payoff  (in cost-benefit terms) and a national economic discussion well overdue for consideration.

So what can we do, right now to support this shift?

Here are some ideas: New Capital and Formation Options for Small/Startup Businesses On April 5, 2012, President Obama signed the Jumpstart Our Business Startups (JOBS) Act into law.  This bipartisan legislation fulfills the President’s call from last fall to reduce regulatory burdens that prevent many small and young businesses from raising capital – specifically by allowing crowdfunding, expanding mini-public offerings, and creating an “IPO On-Ramp” consistent with important investor protections.

Interestingly, I have read a number of articles pushing fear around this and other proposed instruments making their way through Congress and the SEC as being risky. If I want to invest in my neighbor’s business via one of these new or expanded mechanisms, is that more “risky” than investing in the stock market, which is run now run largely by automated hedge fund algorithms? Michael Shuman, co-founder of Business Alliance for Local Living Economies (BALLE) and Post Carbon Institute fellow says the critics have it “180 degrees backward.” Shuman acknowledges that the bill is imperfect, but says:

“Jim Hightower says this bill is about ‘deregulating Wall Street.’ In fact, the bill spells the end of Wall Street as we know it. It allows the 99 percent of us who are not wealthy (’unaccredited investors’) to put our money in the local businesses we love, by removing what were once impossibly difficult and expensive legal barriers. Those barriers had been so high, so misconstructed, so poorly targeted against small business and small investors, that they resulted in almost none of our long-term savings - now totalling $30 trillion - going into the local half of our economy. The JOBS Act ends this monopoly for good.”

Kudos to Steve Case and others for spearheading Startup America Partnership, this innovative and impactive public/private partnership is based on a simple premise: young companies that grow, also create jobs. This is exactly the type of ecosystem that we need to spur our most valuable people and companies to start and grow new companies.

Direct Public Offerings (DPOs) are a little known but mature instrument for raising capital for small to medium-sized companies. Think IPO, but on a smaller scale and investors do not have to be accredited. Most states have them and they are SEC sanctioned – the range is roughly $500K to $5M. The question is, why aren’t more companies using DPOs to raise capital? Watch for this one to explode in the coming years. Google “DPO” and your state or call our friends at Cutting Edge Capital in Oakland to find out what the options are in your state.

Here comes the Access Economy
Look no further than the just-issued Fast Company World’s Most Innovative Companies List 2012 to get one great view into the future economy. The companies and organizations here represent connectivity (Facebook, Twitter), sustainability (SolarCity), huge innovation within traditional industries (HBO, Tesla, NFL, SNHU, Square). From Amazon to Square, disintermediation and reduction of friction are the clarion call. New pathways of connecting and learning, and regardless of where you fall on the Occupy Movement, a truly global movement was created in weeks and months, without a defined leader, without a rich backer and without a particular political agenda. These are all products of our Internet Age, our new Biosphere Consciousness (thank you Jeremy Rifkin for the term). Almost every one of the organizations listed was a small startup at some point - the pathway for starting and creating these companies is now much smoother and the pathway to glory simpler. The next decade is going to be extremely interesting.

Location Based Work is a Dinosaur Awaiting Extinction
“…the madness of American transportation leads to only one conclusion: no solution of the transportation puzzle is possible until work and home are put back together.” - Kirkpatrick Sale, Human Scale, 1980

There are huge inefficiencies in how we work - if one were to objectively look at the road miles, time in transit, airline miles and redundant/idle commercial building space currently expended in getting to and from the office, the amount of carbon and cost to business is simply staggering. As it occurred, the transition from industry and manufacturing to our services-based economy did not have the benefit of a mature broadband network that reaches over 85 percent of the households now in our country, wireless and wireless data services that cover even more and business models springing up every day that favor remote work versus the old “factory” mentality.

The number one contributor to carbon and environmental emissions in the U.S. is squarely rooted in how we work. Work-related activity creates over 90 percent of the carbon emissions and pollution in the U.S., with buildings and transportation accounting for almost 75 percent of the total. Roughly 3 percent of the U.S. workforce telecommutes a majority of the time today, but if that number was 50 percent of those who can, we would cut our carbon emissions by 50 percent while saving 453 million barrels of oil and significantly cutting the 2.1 billion hours we waste in traffic jams every year. Essentially, it would be the equivalent of taking 15 million cars off the road.

Change how your organization works today – start from a standpoint of removing location (if you are not retail, restaurant, library, etc.) and then work your way backwards. We will all work this way someday soon, the sooner you start, the sooner you will realize lower costs, higher employee satisfaction, higher productivity and less environmental impact.  For more information, check out our BetterWork Resource Page.

Banking Regulation Changes & Move the Money
Small businesses did not cause the economic meltdown of the past few years, but they are paying a heavy price under the threat of downgraded loans from regulators – which is the excuse many banks now use.  We need to get capital to small businesses, both startup and existing, and all you hear is that banks are afraid of the regulator bogeyman coming in to downgrade any business loan that is not the color of diamonds. Whomever the genius is behind this dynamic please refer to the cause of our recent downturn: securitized real estate investments and greed - all centered around Wall Street, not Main Street.

Also, let’s change the access to capital rules. We need to get away from the asset-based lending rules and start angling towards a more realistic structure based on novel ideas such as track record and profitability, and wake up to the fact that we are now a service economy. This change is only inevitable as we continuously shift towards a services-based economy and as real estate becomes less important for non-storefront businesses.

Buy Local, Be Local
Personal: Buy local, be local – COMMIT NOW to shifting 10 percent of your purchasing as a business, non-profit and/or personally to local independent businesses, this creates more jobs, increased community wealth and, well, it’s a lot more fun to shop or eat at a place that’s not run by the global machinery. By localizing our manufacturing and food resources, the impacts are far and wide - huge economic growth and mitigation of the environmental impact of food and manufacturing miles. Seek out the Buy Local network in your community, and get involved, sign your business up as a member/supporter and start to hear the sucking sound of community wealth dissipate. For more information on all fronts local, check out http://www.LivingEconomies.org, which is the Business Alliance for Local Living Economies (BALLE).
Policy: City governments need to get their political and common sense heads on straight, point your budgets and spending at local firms - just do it! If you can’t find a suitable local option, then farm it out or legislate this. This is probably the largest shift a community can make towards keeping dollars circulating in the community.
Public/Community Banking:  Cities should move their money to a municipal bank (check out this recent piece in the WSJ), which will keep more money in the community and fund projects others in the community can then follow. Remember the multiplier affect…this one should be a no brainer.

The End
There’s nothing stopping us now and there is too much momentum to turn back. Let’s make this the point, the juncture where we decide to increase wealth in our communities, to truly tap and expand our entrepreneurial hard wiring, and to increase ownership of business in communities all across the country. It will take effort at all local levels, and in state and federal public/private partnership, but the examples are growing and catalyzing. As a society, we spend so much time railing at the politicians and those in “power,” when in truth the field is ready for transformation. Whether starting a business, focusing on buying local, or transforming your workplace, the conditions have never been more ripe than now. The keys to the Access Economy are well within our reach, we need to start taking these pathways and creating a new manifestation of the global economy, one where the money, power and ownership are distributed via interconnected, intelligent virtual and physical communities.

For centuries, the decisions made by the few with the money and the power dictate the priorities of their government and the stories in the media, and they determine the lives and opportunities of their citizens. There is now something bigger. The people of the world see each other and can protect each other. It’s turning the system upside down and it changes everything. Massive change and transformation is underway, our Biosphere Consciousness is forming. Seize the moment and get on board!

The BetterWorld Forum kicked off yesterday with the first of many events focused on the cross section of the new broadband economy, the future of work and the opportunities that exist for businesses and communities in this field.

The inaugural event was hosted at the new BetterWorld headquarters in San Francisco, in partnership with Varsity Technologies.
Joining in the discussion on the future of work were seasoned experts including:

• Jim Lynch from TechSoup Global talked about the telecom donation programs TechSoup has with BetterWorld, as well as their extensive educational resources to support nonprofits in adopting flexible communications and getting nonprofit workers out from behind desks and into the field, where they can have the most impact.
• David Brodwin of the American Sustainable Business Council stopped by and is doing vital work in the Bay Area promoting sustainable business at the civic level.
• Monica Lynn Babine of Washington State University traced the evolution of telework from its nascent stages in the 90’s to the super-powered broadband of today, as well describing Telework Week, it’s impact, and why it matters.
• Scott Ekman of Better Workplace described the evolution of flexible work research from Results Oriented Work Environments (ROWE) at Sun Microsystems, to current success stories, saving companies tens of millions in unnecessary office space by adopting flexible work strategies.
• Adam Black & Tom Hughes of Key WiFi laid out their plan for turning the broadband access challenge on its head by building a global wifi cooperative, allowing individuals to rent out access to their wifi

Future of Work experts present remotely via Adobe Connect

Also featured was the excellent film, “Networked Society, On the Brink” from Ericsson Multimedia, which highlights the past, present and future of connectivity.

Why Focus on Future of Work?

The number one contributor to carbon and environmental emissions in the U.S. is squarely rooted in how we work. Work-related activity creates over 90% of the carbon emissions and pollution in the U.S., with buildings and transportation accounting for almost 75% of the total.  The BetterWorld Forum is a discussion to provide real world and tangible solutions towards an economy based on flexible work, both in the Bay Area and across the U.S.

In BetterWorld Forums, we explore issues around the new Access/Broadband Economy that touches all of us throughout each workday.  We’re exploring the challenges, threats and opportunities that ALL organizations can use to plot their long-term strategies. As we move from an industrial-minded workforce to knowledge workers and flexible environments, this timely dialogue brings us together in a new socially and environmentally sustainable frame.

Next Up

The next event in the BetterWorld Forum will focus on the Future of the Net, featuring a screening of the acclaimed film, “Barbershop Punk“.

It’s National Telework Week  next week March 5-9th, where individuals and organizations pledge to telework for one week.

In celebration, BetterWorld is offering special pricing and discounts in both of our donation programs for nonprofits for the full month of March.

Non-profit Discounts

BetterWorld Audio Conferencing Services will have an admin fee of only $10 until March 31st ($25 off).

BetterWorld VoIP Telecommunications will give all new TechSoup VoIP customers a 50% discount on their first month of service.

California based non-profits may also be eligible for the California Teleconnect Fund, which allows eligible nonprofits to be reimbursed for up to 50% of their phone service cost. Learn more

Why Telework?

There are 41 million people in the U.S. who have telework compatible jobs. According to Kate Lister, of the TeleWork Research Network, once-weekly telecommutes could save the U.S. as much as $350 billion in employer, employee and community benefits.

Telework Week last year was a huge success with the Telework Exchange estimating:

• 40,000 individuals and organizations pledged
• $2,730,229 saved on commuting costs,
• 148,692 hours gained back
• 1,818 tons of pollutants removed from the air
• 3,764,001 miles were saved (not driven)

What can I do?

Join in - take the pledge to telework next week!
If you want to do more telework, bring it up at your work.  We’re excited to help organizations make the leap to flexible work. There has never been a better time for organizations to make the transition to a more flexible communication service.

As originally featured in SustainableIndustries.com by BetterWorld President Matthew Bauer.

A three part series: Reading the tea leaves, accepting the inevitable and bringing focus to the most promising sector of our economy.

For eons, civilization on Earth evolved slowly, innovation and change took place over decades and centuries, until the past few hundred years. Suddenly, an explosion of invention and progress gave society airplanes, cars, global wars, computers, skyscrapers, the Internet, global movement of goods and money, beauty, opportunity and destruction on a level never imagined. For the first time since we pulled our knuckles off the ground, humanity had gotten way out ahead of itself. So who could blame us for buying into the religion of growth for growth’s sake, materialism, globalization and all the ensuing collateral damage.

As this tsunami of advancement began to hit the shore in various forms, the subsequent growing pileup has awakened many to the realities of the positives and negatives of our two-century epoch. In the movie The Matrix, Morpheus offers Neo a choice between the blue pill or the red pill – blissful ignorance of illusion (blue) or embracing the sometimes painful truth of reality (red). Neo chooses red pill and all the pain of reality that goes with it, but also opens himself up to the beauty of possibility.

Our global, one-size-fits-all economy is becoming increasingly outmoded, and with the red pill now making its way into society’s bloodstream, there’s no turning back. As we begin to awake from our hangover and face the reality of recent years, we feel a pull toward something new and different. All around us there is an undercurrent that is slowly but surely transforming the nature and structure of business. It is driven by a cultural shift that seeks greater connection and creativity, living wage jobs, more sustainable lifestyles, empowerment and ownership, and owes much to our newly installed and exponentially growing biosphere connector – the Internet.

Since we’ve taken the red pill, we need to begin by shifting our thinking. Instead of focusing on the bad news as is de rigueur these days, let’s set our sights on the positive currents of our time.

Change is occurring in so many corners of industry – across varied communities, organizations and diverse verticals – it’s everywhere you look. It is visible in the dynamics around the new Access Economy, the disintermediation occurring in every sector, and the “Buy Local – Be Local” initiatives found from Charleston toSeattle. It can also be seen in the resurgence in local banking and a growing multitude of alternative investment instruments. These changes go hand-in-hand with the new wave of creative knowledge and remote workers enabled by the Internet – our relatively new global biosphere network – where over 10 percent of the world’s population is now on broadband in less than 20 years of commercial Internet growth. The list continues to grow, as entrepreneurs find new and innovative ways around the thousand-car pileup otherwise known as our current national economy.  You can liken it to the recovery in nature, how it organizes itself and rebirths after a forest fire, volcanic eruption, or hurricane.

Kirkpatrick Sale’s seminal work, Human Scale, is now over 30 years old, but has never been more valuable in its application to the many systems that drive America, from transportation to education to business. Sale walks through almost every major human-invented system on the planet, from governments, to schools, communities, businesses and even streetscapes, and concludes that each has a breaking point, and that size does matter.

But in this case, running contrary to the big is beautiful mindset, each system has a breaking point and when that is passed, its effectiveness diminishes proportionately as it grows in size. The big box, global corporation cowboys argue that WalMart is more efficient, for example, than many local farmers serving their goods through local stores. When you add up the underlying data and impacts, the ramifications are, in fact, disastrous for communities, our health, the middle class, and on and on. The result is low-wage jobs, lack of ownership and empowerment, decreased food quality and safety, loss of community dollars and loss of Main Street. The point here is that it does not need to be an absolute, but clearly a rebalancing back towards small business is in order, and is on the way.

Small business accounts for roughly one-third of our economy. Firms with less than 100 people account for 99 percent of the companies in the US, 30 percent of the jobs, and 21 percent of the revenue [see How Important is Small Business to the U.S. infographic for details and sources].

However, the number of startups and small firms relative to the overall percentage of full time jobs has been on the decline over the past 20 years. As our economy has further transitioned from manufacturing to services [see Number of Establishments Gaining Jobschart], jobs have been flowing to firms with over 250 employees [Chart 7].

This phenomenon is proportional to the meteoric rise and over-development of big box stores throughout the 80s, 90s, and 00s – which, in turn, led to the  destruction of many Main Street businesses. We can also look to the latter part of this past decade when, during the economic collapse, funds dried up for small businesses, both startup and continuity/growth capital.

This phenomenon is proportional to the meteoric rise and over-development of big box stores throughout the 80s, 90s, and 00s – which, in turn, led to the  destruction of many Main Street businesses. We can also look to the latter part of this past decade when, during the economic collapse, funds dried up for small businesses, both startup and continuity/growth capital.

From a funding perspective, the average small business has approximately $1.3M in annual revenues, which falls into the lower end of the most inefficient funding category in the US business sector today. For companies in the $1M - $5M range, securing growth capital from either bank or equity funding is next to impossible. Even after signing over every possible asset, the financial bar keeps rising higher. This resulting squeeze is not the fault of Main Street or small businesses, but they are left holding the bag, caught in the double whammy of keeping the doors open and trying not to lay off staff, while being told that regulators have tightened the noose and banks don’t want “questionable” loans on their books.

This leaves the equity players in this category with too few assets for bank loans nowhere to go. These companies want to hire and expand but the access to capital is just not there.  This spotlights the outmoded thinking in our economy, and regulators need to wake up to the fact that we are evolving from an asset-based economy. Loans and lines of credit need to transition from houses, cars, buildings, or machines, to track records, profitability, and management teams. This trend is not going away, so laws and rules need to be adjusted.

On the horizon, though, hope springs eternal with Millenials and Gen Y’ers. A recent Inc. Magazine article, showed that of 872 people aged 18 to 34 surveyed about entrepreneurship, 54 percent said they either want to start a business or have already started one. The entrepreneurial spirit is a common theme that binds America and we need to consciously feed this spirit, adjust our thinking, laws and regulations and bolster the next generation. Think of this as the greatest opportunity for our country to stay competitive in the world. What do we have to lose?

The next part in this series will focus on a selection of facts and trends that all point to a inevitable tipping point where small business emerges to become an organizing principle of the new economy.

Also, startups (which typically begin as small businesses) create a constant and large number of new jobs in the US – new firms add a 3M jobs per year, old firms lose 1M (see Job Growth in U.S.  Driven Entirely by Startups, a study from the Kansas City-based  Kauffman Foundation).

As originally featured in Washington Post.com by Matt Bauer, President, BetterWorld Telecom.

By all accounts, the telecom carrier industry is set to grow again in the coming year. In a world of 7 billion people, almost every one of them owns a handset. And more than 10 percent of the globe is now wired on broadband.

BetterWorld has been a part of the telecom industry’s tremendous growth and was fortunate to make the 2011 Inc. 5000 List. We are on pace to be there again in 2012 due, in part, to industry growth, growing demand as our customers use more teleconferencing and telecommuting and BetterWorld’s firm commitment to social and environmental sustainability. This commitment has engendered customer loyalty through tough times, and it helped us build partnerships and goodwill rarely found in our industry.

Looking forward, we are raising a modest amount of capital in the first or second quarter of 2012. This will allow us to hire 10 more people, roughly doubling our staff.

In our customer base of approximately 1,000 small to mid-sized businesses and nonprofits in 40 states, we’re seeing many customers struggle to keep the lights on. They are frustrated about the difficulty of raising capital to grow their businesses.

While we are focused on internal industry concerns such as telecom consolidation and collusion and those that would dismantle net neutrality, our top concern as a company in 2012 is helping to lead the charge and get much more support to small, independently owned businesses across America. We see this as the largest return on investment for the government, investors and consumers. This is also where our national economic focus needs to lie in the short and medium term.

Small businesses account for a disproportionate share of growth and new job creation. Much of the growth that large businesses report is not internally generated but is the result of their buying up smaller businesses.

According to the latest U.S. Department of Labor stats, small businesses account for roughly a third of our economy. Firms with less than 100 people account for 99 percent of the companies in the U.S., and 30 percent of the jobs.

As both large companies and government shrink their employee rolls, America must strengthen, train and support smaller, independent and innovative businesses. There are many positive signs at all levels that this is happening. The support just needs to be coalesced. Some examples include:

●The Startup America Partnership, chaired by Steve Case, is a private initiative that encourages the formation of fast-growing new businesses. Four separate bills and rule changes are fast tracking now through Congress and the Securities and Exchange Commission — all of which will bolster fundraising for smaller start-ups and existing small businesses.

●“Buy Local, Be Local” campaigns are now standard fare in many communities all over America during the holidays. Buying local yields more jobs, stronger communities.

On the horizon, hope is alive with the Millennials and Gen Y’ers. A recent Inc. magazine article stated that 54 percent of this age group said they either wanted to start a business or have already started one.

The entrepreneurial spirit binds America. We need to feed this spirit and adjust our thinking, laws and regulations to bolster the next generation.

Think of this as the greatest opportunity for our country to stay competitive in the world and to hand the next generations a fighting chance.

A little while back BetterWorld was out at GigaOm’s RoadMap conference listening to Jack Dorsey, famed Founder of both Twitter and Square, a new company poised to cut the red tape on transactions and merchanting. This is just some of the wisdom he had to share in his interview with Om Malik, Founder of GigaOm.

Role of Technology
Jack believes that technology creates empathy, which helps to end conflict. In this way, it makes the world feel closer and moves us towards a more compassionate future. Country boundaries are convenient for organization, but really are arbitrary; the human tendency is to create “temporary autonomous zones”, or places where people come together for a purpose and then naturally disperse. Both Twitter and Square bring peer-to-peer interactions to the forefront and allow for more transparency and access, to share information (Twitter) and goods (Square).

Entrepreneurial Start
With two entrepreneurial parents, Jack was poised to get involved in creating new enterprise. Jack shared the story of how his parents met: his father founded a pizza shop with a friend and they had one rule for their pizza shop - not to date any of the waitresses. Jack’s mom was the first waitress hired and the rest is history.

“Deep Romance” of Commerce
Dorsey describes the future of commerce as hyper-personalization rather than mass production; a trend towards “wabi sabi” or contrast of perfection and rustic. The more a customer is drawn into the crafting process of a product, the more likely you can create a “deep romance” with the brand. Simplification is the key principle for creating something customers will love, to boil down to the essence of what it is that you are providing. And of course, to make things fun.

Bringing it Back
Here at BetterWorld, we’re working to take some of these lessons to heart. Although one could argue it is difficult to create “deep romance” with your telecom service, we still believe that it is possible to provide as pleasant and friendly a telecom service as possible, with a longterm commitment to ‘customer delight’. One of the ways we’ll be improving in the next few months is through new, more effective tools to build greater transparency into our provisioning process. Another improvement we’ll be implementing in the new year is to provide standalone solutions documentation to better enable our customers to find answers to their questions quickly.  How about you? What ways does your business or organization incorporate “deep romance”  and fun into what you provide?

In service,

The BetterWorld Team

Several of the BetterWorld team made it out to the west coast this past week, visiting great customers like New Resource Bank, Fair Trade USA, Clif Bar, Mother Jones, Uber, Cafe Gratitude, the Hub SoMa, Walden House and more!

Our team was happy to discover that flying on Virgin America was one of the most productive days while in transit in our company’s history.

The highlight of the trip: using in-flight internet access, BetterWorld’s Ali Gunertem was able to offer instant telecom support for (BW customer) Nest Collective, while literally “in the cloud” at 30,000 feet.

Remote work is here to stay and the case studies of anytime - anywhere BetterWork are growing everyday. Thanks to Virgin America for helping usher in the future of work!