Hot New Market: Online Worlds

Virtual worlds--those avatar-driven electronic spaces like Second Life and The Sims--are booming. Companies like Starwood Hotels are spending money to build virtual locations, and Reuters has assigned a journalist to cover Second Life goings-on. Should you be there, too?

Russell Holliman, co-founder of Podcast Ready, a Houston startup projecting 2007 revenue of $5 million, says yes. He has been using Second Life to host seminars about podcasts and his company’s software application, which enables portable media players to receive podcasts automatically. “When we have an event, we get quite a bit of traffic, and we expect that to grow as we develop our own location,” says Holliman, 35.

“There’s a tremendous amount of commerce that takes place [in virtual worlds],” says Steve Rubel, senior vice president of Edelman’s Me2Revolution PR practice in New York City (www.edelman.com). “If you sell or make something you can refashion and sell in the virtual world, you can do well.”

T. Sibley Verbeck, founder of The Electric Sheep Company, which is building virtual-world presences for companies like Starwood and Edelman, says it’s a bit early for entrepreneurs to spend big bucks developing their virtual world presence, with some exceptions. “Fashion is vibrant,” he says. “If you’re a small company that makes T-shirts or other things that can make your avatar look good, it makes sense. If [your] business involves building a community or reaching out to people through events, it’s a natural fit.”

Originally published in the February 2007 issue of Entrepreneur Magazine

Top Ten Business Industries to Keep an Eye on in 2007

1. Service-providing industries

The long-term shift from goods-producing businesses to service-providing businesses is expected to continue in the United States as businesses outsource manufacturing jobs out to the rest of the world where labor is less expensive.

2. Education and health services

This industry is projected to grow faster than most other industries.

The growth in this sector will continue to grow, driven by increasing demand for healthcare and social assistance because of an aging population and longer life expectancies.

According to the Department of Labor, private educational services will grow by 28.7 percent through 2012.

Rising student enrollments at all levels of education will create demand for educational services, such as educational consulting businesses, home tutoring, etc.

3. Professional and business services

According to the Department of Labor, the businesses included in the professional and business services industries are expected to grow by a little over thirty percent.

This is an area that will be one of the fastest growing industries in our U.S. economy!

And within the business services industry, businesses who specialize in employment services will grow by over 50 percent!

Other businesses expected to grow within this hot industry are:

• Professional, scientific, and technical services are expected to grow by over twenty-seven percent!

• Businesses involved in computer systems design and related services will grow by over fifty percent and may add more than one-third of all new jobs in professional, scientific, and technical services.

• The increasing reliance on information technology and the continuing importance of maintaining computer systems and network security will drive business growth significantly.

• Management, scientific, and technical consulting services also will grow very rapidly, by 55.4 percent, spurred by the increased use of new technology and computer software and the growing complexity of business.

4. Information Businesses

Selling information is and will always be a profitable business. Within the next ten years, I believe it may get even hotter!

Information businesses and related industries are expected to increase and will even add well over half a million new jobs by 2012. This includes some fast-growing computer-related industries such as software publishers, Internet publishing and Internet broadcasting; Internet service providers, Web search portals, and even data processing services.

And don’t forget traditional businesses built around broadcasting, newspaper publishing, periodicals, books, and directory publishers.

5. Leisure and hospitality

Arts, entertainment, and recreational-based businesses, including physical fitness and exercising (for instance, personal training) will grow by a little less than thirty percent between now and 2012. However, most of these businesses will be involved in the amusement industry, gambling, and the recreation sector.

Most of the growth is going to stem from the growing participation by the public in arts, entertainment, and the recreation activities. The reason these activities will tend to increase, according to the Department of Labor, is typically because of increasing incomes, leisure time, and the increasing awareness of the health benefits of physical fitness.

Accommodation and food service businesses are expected to grow by over sixteen percent. The growth in this particular field will be concentrated in food services and drinking places. The main reason why this business is going to be one of the hotter industries is due to a continuous trend towards increases in population, more two-income families, and a trend towards more sophistication in the population’s dining habits.

6. Financial activities

The US Department of Labor has said that businesses involved in financial activities are projected to grow by 12.3 percent over the next ten years.

One sector to keep an eye on is heavy industrial and commercial equipment leasing and rentals. The US is expecting a growth in employment in within this particular sector by almost forty percent!

Another “hot pocket” in the financial industry is any business having to do with finance and insurance. Both are expected to see positive increases into 2012.

If you look at the employment in securities, commodity contracts, and other financial investments and related activities, which are expected to grow 15.5 percent by 2012, you’ll be able to see a perfect trend toward a continued dependency on capitalism and the importance of money. Look at baby boomers who, in their peak savings years, fall into categories and age brackets of tax-favorable retirement plans. The more this generation continues to outlive prior generations, the more they will be looking for businesses who can help them with their finances.

Also, as individual nation’s economies continue to merge towards a globalization of the securities markets, the more businesses involved in this industry will be in very, very high demand.

7. Construction Related Businesses

As the housing market, at the time of this writing, continues to grow and the demand for new housing increases, the construction business will account for the bulk of the construction related industries.

8. Professional and related occupations

Professional and related businesses will grow the fastest and add more new jobs than any other major group. Through the 2012 period, a 23.3-percent increase in the number of professional and related work is projected, a gain of 6.5 million.

9. Management, business, and financial business

Businesses who direct and manage the activities of other businesses, government agencies, and other organizations are expected to increase by over fifteen percent by 2012.

Among the financial management businesses, accounting and auditing firms will grow quite a bit because of the increased number of businesses growing throughout the world and into the global economy.

Management analysts also will be one of the fastest growing businesses in this group, along with personal financial advisors, with increases in the 30 percent range for each.

10. Installation, maintenance, and repair

Being in the business of installation, maintenance, and repair means you may install new equipment and/or maintain and repair older equipment. These businesses will grow by over thirteen percent through 2012. The fastest growth rate will be among heating, air-conditioning, and refrigeration mechanics and installers, an occupation that the Department of Labor states is expected to grow 31.8 percent over the 2002-12 period.

The main reason this business will have increasing growth potential is partly due to increased newer construction -- both commercially and residentially. With the exception of housing being built in colder regions, cooling systems will be the norm in newer construction – both commercial and residential.