According to BusinessWeek,1 more than half of all
the businesses in the United States are run out of someone’s home, not in
traditional office space — and their employees collectively account for
more workers than all the companies backed by venture capital firms.
There are a number of factors that have pushed
this trend to the forefront of business news recently. One is the recession,
which has encouraged companies to lower their costs by employing outside
contractors. To a large extent, home-based businesses are one- or two-person
firms doing work for consumers or larger businesses.
In a sense, you could call “homepreneuring” a
“back to the future” trend. Home-based businesses were at the core of the
economy prior to the Industrial Revolution. Then, from the mid-18th to the
mid-20th centuries, economies of scale resulted in their almost total
replacement by centralized factories, offices, agri-business enterprises, and
schools.
But then, a new trend of “working at
home” appeared in the 1980s when the first affordable personal computers were
introduced with dial-up point-to-point modems. As the popularity of cell
phones and other hand-held devices complemented the emergence of the World Wide
Web in the 1990s, location began to matter less and less. Now, with most of
the American economy performing knowledge work — as opposed to the
manufacturing of physical goods — it’s become possible for workers and entire
businesses to thrive in the home setting.
That trend, in turn, is giving rise to even more
new technologies that facilitate the phenomenon of leaving the traditional
office behind. Cloud computing, online collaboration tools, Web conferencing,
and smart phones have all become part of the modern home office.
As the technological feasibility of home-based
businesses has increased, there has also been a subtle shift in attitudes. For
example, the corporate world once viewed businesses run out of the home as
hobbies or else as quaint, marginal operations not worth noticing. But today, large
and mid-sized firms increasingly recognize home-based firms as useful suppliers
and valuable customers.
A new report from...
