ENTREPRENEURS: THE SERIES
Part 3 of 3 Part Series




The New Entrepreneurial Economy
Artisans, historically defined as skilled craftsmen who fashioned goods by hand, will re-emerge
as an influential force in the coming decade. These next-generation artisans will craft their goods
and shape the economy -- through upswings and downturns -- with an effect reaching far beyond
their neighborhoods, or even their nations. They'll work differently than their medieval counterparts,
combining brain with brawn as advances in technology and the reaches of globalization give them
greater opportunities to succeed.

That's one of the conclusions in the third installment of the Intuit Future of Small Business Report(TM),
which looks ahead 10 years and examines the prospects, influences and profiles of small business.
The report is sponsored by Intuit Inc. (Nasdaq:INTU) and authored by the Institute for the Future.

 "No longer confined to a Main Street store front, tomorrow's small businesses will increasingly collaborate
with big businesses, gain access to big business infrastructure, and take full advantage of a global
marketplace," said Rick Jensen, senior vice president and general manager of Intuit's small business group.
"The next generation of entrepreneurs will be knowledge artisans, yet in many ways look very similar to their
pre-industrial age counterparts."

Three Trends Influence New Entrepreneurial Economy

The study identified three emerging trends that reveal small businesses, equipped with advanced technology
and unprecedented social networks, will amplify their reach and capabilities.

   -- Brain Meets Brawn to Create Opportunities for Small Business
        The emergence of barbell-like economic structures will
        drive new business collaborations, creating greater
        opportunity and profitability for small business.

   -- Barriers Down, Small Business Opportunities Up
        Access to big business infrastructure will expand, making their
        sophisticated technologies available to small and personal
        businesses, at lower risk, with a variable cost structure.

   -- The Next Wave of Globalization will be Driven by Small Business
        Muted trade barriers, improved technology, and
        professional and social networks across borders will
        facilitate small business access to new markets.

Brain Meets Brawn to Create Opportunities for Small Business

The first trend is based on the concept of barbell economics. It
envisions a barbell structure for most industries, with a few giant
corporations on one end, a relatively small number of mid-sized firms
in the middle, and a large group of small businesses balancing the
other end. As this structure becomes more prevalent, there will be
increasing opportunities for small business to flourish in niches left
untouched by the global giants. In addition to the physical skills
that are the foundation of many small businesses, there will be
greater opportunities for entrepreneurs to use their business savvy as
well, to increase profits by collaborating with their larger counterparts in
areas such as specialized services, innovation and outsourcing. As a result:

   -- Small businesses will be better positioned than large
        corporations to provide customers with highly targeted,
        customized and relevant products. Given their size and
        agility, small businesses are extremely well positioned to
        serve niche markets.

   -- Outsourced innovation from big business will increase
        opportunities for small business. Simply put, large
        corporations will increasingly tap small business for
        collaboration, fueling the number of small business
        innovators.

Barriers Down, Small Business Opportunities Up

The second trend foresees dramatically lowered barriers to big
business infrastructure, giving way to lightweight technologies that
make running small and personal businesses easier than ever. As a
result:

   --  Small businesses will reclaim manufacturing, fueling
        small-scale and specialized production. Tools such as
        computer-aided design and desktop manufacturing systems will
        transform the manufacturing process and change the very nature
        of producing goods.

   --  Plug-and-play infrastructures will make small businesses more
        competitive and successful. With the ability to access world
        class, large-scale infrastructure and new technologies, small
        businesses will expand their reach and address industries
        formerly served only by big business.

   -- The shift to variable cost structures for core business
        operations will reduce risk and increase opportunities for
        small businesses. As startup and operating costs decline, the
        risks associated with starting and running a small business
        will decrease, allowing for greater operating speed, agility
        and flexibility.

The Next Wave of Globalization Will be Driven by Small Business

The number of U.S. small businesses trading globally will substantially increase, fueled by
cross-border business opportunities, technological advances leading to broader social networks,
and reductions in export costs. More specifically:

   -- Almost half of U.S. small businesses will be involved in
        global trade by 2018. As the costs associated with doing
        business globally continue to decrease, small businesses will
        make no distinction between domestic and international
        commerce.

   -- Social networks will fuel borderless commerce. Online and
        offline social networks will help remove soft trade barriers,
        such as language and cultural differences. These networks will
        introduce small businesses to new markets and facilitate
        cross-border trade.

   -- Globalization will increase small business diversity and
        amplify its economic value. Small business diversity will help
        increase market growth in the U.S. and abroad and will unlock
        new opportunities for all small business owners.

The Future Resembles the Past

With the removal of technological and geographical limits, entrepreneurial artisans will reassert
some of the force and influence they lost to the industrial revolution and the growth of manufacturing
industries, the study found.

"Like their medieval predecessors in pre-industrial Europe and Asia, these next-generation artisans
will ply their trade outside the walls of big business, making a living with their craftsmanship and
knowledge," said Steve King, senior advisor at the Institute for the
Future and study co-author.

"But there also will be marked differences. In many cases, brain will meet brawn; software and technology
will replace hard iron and hard labor. As a result, small businesses will increasingly serve international
markets and customers as easily as they serve their local customers today."