According to the press release announcing the company, Coworks:

"... provides freelancers and buyers with a unique online platform that takes the “word of mouth” practice, which has worked for so many years in the freelancing industry offline, and combines it with the power of online social media capabilities."

The site works on a referral model. Once you list a job, the website suggests contractors who've been recommended by people within your own network on the site. 

I haven't had a chance to test the site, but it appears you can link it to your LinkedIn and Facebook accounts. This means you can check and see if you have an existing relationship of some sort with potential freelance hires.  

The site was only recently launched and is still in Beta.  

We find Coworks interesting on several levels.  At the broad level, it's another example of how social is being added to many types of products and services.  

Second, it's another example of the growing importance of online networks and reputation for freelancers.  

And third, it's yet another example of the growing number and diversity of online talent marketplaces.  

Quantum computers are very, very fast. Instead of using the traditional approach of a string of 1's and 0's that are either turned on or off, quantum computers use quantum bits, or qubits.

Qubits take advantage of the weird behavior of quantum mechanics which means they can essentially be both on and off at the same time.  This allows them to multitask and at least in some cases potentially run thousands of times faster than traditional computers.

The leader in quantum computing is a Canadian company called D-Wave. Their machines are not cheap to buy nor cheap to run. MIT's Technology Review reports both Lockheed Martin and Google likely paid in the $15 million range for their quantum computer. 

And GigaOm has an interesting article on the expensive and difficult need to cool quantum computers to near absolute zero.

The picture on the right shows part of the D-Wave cooling tower.  

So don't expect to see quantum computers at Best Buy anytime soon.

Google says they are going to focus their quantum computing efforts on machine learning applications.

According to a NY Times article, Google's Quantum Artificial Intelligence Lab, which is what they are calling their quantum computing entity,will focus on:

"machine learning, which is the way computers take note of patterns of information to improve their outputs. Personalized Internet search and predictions of traffic congestion based on GPS data are examples of machine learning. The field is particularly important for things like facial or voice recognition, biological behavior, or the management of very large and complex systems."

Quantum computing is potentially more than just a game changer for computing. It could fundamentally change pretty much everything from how we view the universe to humankind itself.  Yes, this sounds more than a bit over the top.  And yes, it's still years away.  

But the potential power of quantum computing is nothing short of amazing.

They are described by Twitter as "ordinary Tweets purchased by advertisers who want to reach a wider group of users or to spark engagement from their existing followers."

Promoted Tweets have been around for a couple of years, but Twitter limited the number of companies allowed to use them.  They recently changed this policy and now anyone can pay to their Tweets promoted. 

Over the last month Small Business Labs has been experimenting with promoted tweets.  Here are our reactions:

1. Promoted Tweets is extremely easy to use. We were up and running in minutes.

2. Targeting is excellent. You can target your promoted Tweets based on broad interest groups, by keyword, by location and/or by selecting the followers of users.  

We tried a number of different approaches but quickly found selecting the followers of influential users most effective for us. For example, if we were promoting a Tweet about coworking we targeted it a the followers of the thought leaders in the coworking space.  

3. Twitter uses a Google-like auction system for Promoted Tweets.  And like with Google, you only pay for performance, with performance being measure on a cost-per-engagement (CPE) basis. This means you only pay when someone clicks, retweets, replies to, or favorites your Promoted Tweet. You can also choose to pay for followers added as an option.

4.  You can set per day limits, so you aren't exposed to big spend overages.  

For our test we allocated $25 per day for a month and promoted one to three tweets per day. We spent about $350 during the test and we generated a bit over 600 engagements.  We didn't pay for followers.

So we now get to the interesting question - is a Twitter engagement worth the 58 cents we paid per engagement?  

Each business will need to make their own call on this. But for business the answer is subjective and not fully quantifiable. I can easily measure the ROI of clicks that come from my Tweets. But at least for our business, I don't see how to quantify the impact of the other engagement methods - retweets, favoriting and replies. 

Our subjective view is some of our promoted Tweets were well worth the cost, others not so.

Our bottom line is we think we're getting enough value to continue promoting Tweets, but we're going to do so on a very selective basis.

Our advice for small businesses is:

1. If you are an active Twitter user, Promoted Tweets are well worth experimenting with. A test campaign is simple, cheap and takes little time.  

Make sure you measure what you can and minimize your costs. Like with Google Adwords, minimizing cost per engagement is going to be key to a positive ROI. .  

2. If you aren't an active Twitter user, Promoted Tweets are unlikely to be effective and not worth the time and effort associated with a test campaign.

As always, we recommend small businesses experiement with a variety of social media platforms. So if you aren't a Twitter user, consider playing around with it to see if it could be of value to your business.  

Lotus Development Corporation released 1-2-3 in 1983 and it quickly became one of the most popular PC software products of its era.  

Along with other now forgotten PC software companies like Word Perfect (word processing), Ashton-Tate (database) and Software Publishing (graphics), Lotus helped drive the PC revolution.

Lotus 1-2-3 rose and fell quickly. From near total market dominance in 1986, 1-2-3 became a competitive also-ran by 1993.  A combination of corporate hubris, product and marketing miscues and fierce competition from Microsoft did it in.  

By the time IBM acquired Lotus Development in 1995, 1-2-3 was effectively dead. So dead in fact, IBM didn't even want it (they acquired Lotus to get access to Lotus Notes).

Lotus Development Corporation was in many ways a trailblazing company. They were the first U.S. public company to offer benefits to same sex couples and one of the first to truly embrace and support women and minorities. They also focused on work/life balance issues before the term was even invented.

Lotus was also one of the first "work hard/play harder" tech firms. I'm reminded of this when I visit companies like Google and Facebook and realize how similar their cultures are to Lotus in its heyday.  

Lotus was also an innovative marketer. Below is a promotional video Lotus did for an early version of 1-2-3. MTV had just launched a few years earlier and this was one of the first marketing videos of this style ever produced.

I joined Lotus in 1985 when they acquired a startup I was working for. I stayed until 1996 and enjoyed all my years there. Great people, exciting and challenging work and constant learning were all part of the job.

The big lessons from my time there are:

1. Success is often fleeting.
2. Long term success is both rare and hard to achieve. 
3. It's easy to think success is happening because of you when in fact it's happening despite you.

So rest in peace Lotus 1-2-3, and rest in peace Lotus Development Corporation.  

According to his work, the creative class - a grouping of knowledge-based professions - has rapidly increased its share of total employment over the last 2 decades and now comprises about one third of all U.S. jobs.

While the majority of creative class members have traditional jobs, a growing share of the self-employed are also members of the creative class.

The chart below shows the percent of total self-employment for 2 of the 3 broad employment sectors. I left off the services sector because it made the chart too busy.  

The working sector consists consists of manufacturing, construction, retail and related industries. The creative sector consists of professional, managerial and educational services; finance and insurance; information services and related industries.

The data does not map exactly to Florida's definitions due to differences in source data. But this data, which comes from the U.S. Bureau of Labor Statistics, is directionally consistent with Florida's data.

As you can see from this chart, the share of creative class jobs has increased from roughly 25% in 2003 to almost 30% in 2012. The working sector's share of self-employment fell from almost 40% to about 34%.

The chart below shows the number of self-employed by sector. It shows the number of self-employed in the working sector has fallen substantially since 2007. This is mostly due to the recessionary bust in the construction industry and falling retail self-employment.

And while self-employment job growth in the creative sector has been weak, it did grow through the Great Recession - which is quite an accomplishment.

It will be interesting to see if the working sector recovers as the economy improves. A bit more than one third of all constructions workers are self-employed (and 1 in 6 of the self-employed are construction workers), so a pick-up in this industry could easily shift these numbers.

But we think the long term trend towards more creative sector self-employment is strong and this sector will continue to gain share.  

But as the chart below (from a NY Times Economix blog post) shows, this shifted in 2009 and temps now work, on average, 30 minutes more per week than regular employees.  

I think this shift is an example of broader changes taking place in the economy as more firms increase their use of temporary and contingent workers. 

BTW, another interesting tidbit from this chart is according to the U.S. Bureau of Labor Statistics, you need to work 35 hours or more to be considered full time.

This means on average the U.S. workforce is part time.  

While good news for the U.S. economy, the energy boom has taken the air out of cleantech investing, especially in the areas of wind power, solar and biofuels.

Key quote from SiliconValley.com's article Latest cleantech funding woes spark fears of industry slide:

New figures from the National Venture Capital Association paint a sobering picture: Investments in alternative energy and related fields have dropped for five of the past six quarters. The $368 million that venture firms poured into cleantech in the first three months of this year was roughly a third of the total from the same period in 2012.

So what is the Cleantech industry doing? Pivoting, of course.

And they're calling their new focus the Cleanweb.  The Cleanweb marries information and Internet technologies - think the social web, big data, mobile, apps and sensors - with clean/environmental initiatives. 

According to an article in Gigaom, this means staying away from capital intensive hardware and clean energy production companies. Instead, Cleanweb investments focus on companies "that are “capital efficient” and have business models that deliver immediate value to customers, like asset recovery, reuse and efficiency." 

A presentation on the Cleanweb has a number of interesting company examples. They include firms that make immediate sense like smart thermostat company Nest.  But they also have a few that I find to be a bit of reach, like peer to peer travel rental company Airbnb.  

Yes, I get that the sharing economy reduces the demand for resources. But this claim seems more like a PR ploy to try to counter act the negative press Solyndra and Fisker have given Cleantech rather than an accurate description of their business.

Regardless, this pivot will be good for small businesses. The Cleanweb focus is on improving energy efficiency, the mitigation of environmental problems and a greater focus on conservation. All of these create opportunities for small businesses to play a role.

And the Cleanweb is needed. Climate change continues to be a major economic and political risk, environmental degradation is still all too common and resource efficiency is becoming more critical. We need innovative companies to help fix these problems.

Key quote:

The Obama administration has touted a boost for entrepreneurship as one of the health-care law's key benefits. The Kauffman-RAND Institute for Entrepreneurship Public Policy in Santa Monica, Calif., says the law could increase the number of new U.S. businesses by as much as 33% over several years.

The reasons for this forecast is Obamacare reduces health insurance related job lock, which is the term economists use to describe the reluctance of workers to leave their jobs because doing so would mean losing fringe benefits, especially health insurance.

Obamacare reduces job lock because people going out on their own will be able get health insurance through mandated state or federally run insurance marketplaces. 

We covered this topic earlier in the year in our article Obamacare, Job Lock and Freelancers. We agree that the Affordable Care Act will reduce job lock and likely increase the number of people starting small and solo businesses.  

But having said that, a "33% increase over several years" is quite large. Depending on how they are defining small business (I couldn't find a source for this forecast except for the WSJ article), this could mean as many as 2-3 million more small/solo businesses over several years.  

As we point out in our article, studies on job lock vary in terms of their view of its impact. But I haven't seen a job lock study showing this big an impact.

Also, we've done a lot of work on the decision process people go through prior to starting a small or solo business. While health insurance related job lock often plays a role, it's but one of many factors people consider.  

I hope they're right, but this seem too optimistic to me.  My guess is we will see an increase of 5% - 10% over this time frame.  

I also hope the mandated state and federal exchanges offer decent health insurance at a reasonable price.  We'll start finding out over the next few months as more coverage and cost details emerge.

Our advice to small businesses and solopreneurs (and to those considering it) on this topic continues to be the same. Spend some time coming up to speed on the status of the mandated exchanges in your state and monitor their progress.  

A good place to start is the Health Reform section of the Kaiser Family Foundation.  The information is a bit deep for most of us, but they have good summaries and calculators, as well as news feeds on new information.

"you will hear jarring expressions of distinctly liberal opinions. And they express salty disgust for the US Chamber of Commerce and the National Federation of Independent Business, which claim to speak for the little guys on Main Street. Actually, these little guys accuse the US Chamber and the NFIB of identity theft."

The article goes on to discuss liberal leaning small business associations and their work. The featured groups are the American Sustainable Business Council, the Main Street Alliance and the Small Business Majority.

Not surprisingly, if you do some digging you will find all three of these groups have links to the Democratic party and various progressive groups. In other words, these groups are not non-partisan and they pretty much line up in lockstep with the Democratic party on policy issues.

But don't get me wrong, I'm not criticizing them for being partisan. As we've pointed out in the past, there are few non-partisan policy oriented think tanks or trade associations. That's just how DC works.  

Other examples of this partisanship include the two best known small business trade associations - The Nationa Federation of Independent Businesses (NFIB) and U.S. Chamber of Commerce. They both lean right politically and tend to line up lockstep with the Republican party on policy issues.

We like and respect all of these groups and the work they do. But we also understand they are partisan and their work often reflects their support for their political party of choice. 

Our advice to small business owners when dealing with these group is:

1. When you read policy positions or research from these groups understand that their political orientation has likely had an impact on their work.

2. When choosing a group to join or support do some research and make sure you join or support a group that reflects your values and/or the values of your business.

3. Get used to hearing multiple voices with very different messages claiming to be "the voice of small business" in DC.

BTW, the answer to the title question is no; small business owners are not the new left. Surveys consistently show small business owners are more likely to be Republicans or lean Republican than be Democrats or Democrat leaning. 

For example, 46% of the respondents of a recent small business poll by the left leaning Small Business Majority said they were Republican or lean Republican. 35% said they were Democrats or Democrat leaning.

But more importantly, pretty much all small business owners are pragmatists when it comes to government policies that impact their business. Because of this, they are not ideologues. They will support policies from any party that they believe will help their business thrive.  

To the best of our knowledge, this was the first time coworking blipped on a national, statistically significant survey of any kind.

We were equally excited to see coworking listed as the work location by 2% of the respondents to an opinion poll on The Role of Micro Businesses in the Economy.  This survey was conducted a few months after our survey.  

Conducted by the Association for Enterprise Opportunity, the National Association for the Self-Employed (NASE) and the Small Business Majority, this survey focused on businesses with less than 10 employees.

I know 1.7% and 2% sound like pretty small numbers.  But these surveys reflect populations of 17 million in the case of our independent worker survey and roughly 22 million in the case of the micro business survey.  Which means these surveys suggest there are hundreds of thousands of U.S. coworking members.  

These numbers are obviously too high. This is a common survey problem. When you ask about new, trendy, fashionable or exciting things you tend to get a lot of false positives.  Coworking fits this description - especially given all the positive press it's been getting.  

But what these surveys shows is that the awareness of coworking is growing and an increasing number of mainstream small businesses and independent workers are starting to see it as a viable place to work.  

This data reinforces our view that the coworking boom is continuing.

The chart below shows self-employment as a percentage of total employment by age group. The data comes from the U.S. Bureau of Labor Statistics (BLS) and includes both unincorporated and incorporated self-employed.

It shows how self-employment increases with age, peaking with over a quarter of workforce participants 65 and older being self-employed. This works out to about 1.9 million 65+ self-employed workforce participants.  

By way of comparison, overall about 10% of the U.S. workforce is self-employed.  

Also illustrating this point is the age composition of the self-employed.  85% of the self-employed are 35 or older, 64% of the  are older than 44 and 12.5% are 65 or older.  Only 15% of the self-employed are younger than 35.

Based on our interviews and other research on the independent workforce, there are several reasons self-employment increases with age:

1. Older workers are more likely to have the skills, networks and financial resources to become successfully self-employed.

2. Older workers are more likely to be interested in the work flexibility and control self-employment provides. This is especially true for workers 65 and older.  

3. Older workers, especially those 65 and older, face diminished traditional job prospects due to age discrimination and other issues associated with hiring older employees (increased benefits costs, etc.).  

One of the reasons we're forecasting a continued increase in the number of U.S. independent workers is demographics.

The large cohort of aging baby boomers are moving into the years when they are more likely to become self-employed.  Aging boomers are also more likely to delay their retirement and stay in the workforce longer than prior generations. The result of these trends will likely be an increase in self-employment.

Special thanks to BLS economist Steve Hipple for providing me with this data. See his report on self-employment in the U.S. for more information.   

Like coworking facilities, hackerspaces (also called makerspaces) generally use a gym-like membership model with  with monthly fees ranging from $50 to $200 per month.

These spaces have a variety of industrial equipment and tools available for member use including things like laser cutters, 3D Printers and other computer controlled tools. Electronics related tools and equipment and also usually available. 

And again like coworking facilities, access to a community of like-minded people is a key selling point.

There's lots of collaboration at hackerspaces.  

My favorite part of the article is their description of the vibe at a hackerspace, which I think is quite accurate:

The atmosphere at a hacker space is a bit like finding yourself in an episode of “The Big Bang Theory.” There is unabashed geeking-out on science and technology, and an enthusiasm for making that is infectious.

The article focuses on the hobbyist side of hackerspaces. But we've found in our research that hackerspaces are also hotbeds of entrepreneurship.

For more information, see Make Magazine. It's the publication of record for hackerspaces and the maker movement in general. 

Not surprisingly, employment in the construction sector also took a big hit with the collapse of construction spending.  I put together the chart below. It shows that 6 years after peak construction employment, the U.S. still has almost 2 million fewer construction jobs.  

    While the outlook for construction and construction employment is positive, we're still years away from returning to the number of construction jobs we had in the boom years.

As reported in a New York Times article on Axle, it's a logical extension of the food truck and a great example of the growing role of truck-based commerce.  

The economic and business model advantages of food trucks is increasingly being recognized by entrepreneurs from a wide mix of industries.  We expect to see many more examples of this form of mobile commerce in the coming years.

Of course most custom bikes are a lot cheaper than $22,500.  Prices in the $5,000 to $7,000 range are common and entry level custom bikes can be found in the $2,000 to $3,000 range.  

The demand is coming primarily from aging baby boomers and Gen Xers with disposable income who have discovered biking is a great, low impact way to get exercise that also provides sustainable transportation.  

My favorite example from the story is bike frame maker Richard Sachs. Key quote on this artisan maker: 

Today’s base price for a Sachs frame, which is all he makes, is $4,400, exclusive of the $400 fee required to put your name on his list. For that privilege, customers wait up to eight years. 

The handmade bike industry is large enough that it has its own trade show with hundreds of exhibitors. This year's show had 22 new handmade bike companies that exhibited at the show for the first time. Most of these are very small shops or solo bike artisans.  

One of the new exhibitors this year was A*Train Cycles, a one man shop in Minneapolis. One of their bikes is pictured below. Not surprisingly given their location, it's a combo mountain-snow bike.

One of the leading cities for artisan bike manufacturing is Portland.  It's the most biking oriented city in the U.S. and home to many artisan bike manufacturers. 

But this trend is not limited to the U.S. According to the BBC, handmade and custom bike manufacturing is also growing in the UK.  

The growth of handmade and customized bikes is a great example of the growth of small manufacturing and new artisan economy trends.  

He argues that technology is destroying more jobs that it's creating, leading to a potential future where there simply isn't enough work to go around.  Key quote from the article:

We face a future that will be defined by the end of work - it can become a golden age or one of horrific consequences. Horrific because we have no means of dealing with this type of future. We have nothing that has prepared us for it. We only know how to punish and ridicule those that don't work. But what if there is no need to work? 

A good example of this is Yobot (shown in the 30 second video below), the luggage storing robot at the Yotel Hotel in New York city.  It replaces a bell boy by automatically storing your luggage.

We're more optimistic about the future of work than Tom appears to be.  But we agree automation, technoloy and global competition means work will be very different in the future.

We think more people are going to have to create or invent their own jobs. This is why we are focused on studying the growing role of the independent worker and independent economy.  

We admit the jury is still out on whether or not the independent path will be successful for most people. But based on our research, we're cautiously optimistic many can achieve success this way.

We'll have more on the independent economy in the coming weeks.

Others are starting to also suggest this.  Noted author James Surowiecki's New Yorker article The Underground Recovery points out:

Ordinary Americans have gone underground, and, as the recovery continues to limp along, they seem to be doing it more and more.

One indicator is retail sales, which have held up quite well given the high level of unemployment and historcially low workforce participation rate.  Key quote:

Bernard Baumohl, an economist at the Economic Outlook Group, estimates that, based on historical patterns, current retail sales are actually what you’d expect if the unemployment rate were around five or six per cent, rather than the 7.6 per cent we’re stuck with. The difference, he argues, probably reflects workers migrating into the shadow economy. 

The Washington Post also looks at this topic and cites an academic study on the size of the underground economy:

Is there any hard data on the underground economy? Some. A 2011 by Richard Cebula and Edgar Feige estimated that as much as “18-19 percent of total reportable income is not properly reported to the IRS.” That’s as much as $2 trillion in underground economic activity, with about $500 billion in taxes that aren’t being paid to the government.

For obvious reasons data on the underground economy (also called the informal economy) is hard to come by.  But it's becoming increasingly clear this segment of the U.S. economy is growing.  

This ecosystem includes a wide range of firm types, including:

Talent marketplaces: firms like Elance, Odesk and Freelancer.com that connect independent workers with those interested in hiring them.

Crowdsourced Services: firms/services like CrowdFlower, Mechanical Turk, Live Ops that crowdsource large numbers of independent workers for buyers.

Micro-Task marketplaces: firms like Task Rabbit, Fiverr, Rev.com, that allow buyers to hire independent workers to do even the smallest of tasks.  

Peer to Peer Commerce Companies: firms like Airbnb, Uber, Poshmark that allow anyone to become an independent businessperson by selling a good or service.  

Technology companies catering to independents: firms like Intuit, Square, 37 Signals that have built products specifically for independent workers and micro business owners.  

Coworking facilities offering office space, community and activities oriented to the needs of independent workers. 

The list goes on and on and, of course, includes Emergent Research client MBO Partners.  They provide back office infrastructure services for independent workers.  

This growing ecosystem of companies is a clear indicator that the independent workforce is growing both in terms of numbers and importance to the economy.  

This is the trend towards pet owners viewing themselves as "pet parents" and treating their pets as full-fledged family members.  

Spoiled Rotten Pets is a new TV series that covers the world of "outrageous pet pampering and meets some shockingly over indulgent pet owners who wouldn't have it any other way". 

Included in early episodes are a visit to a pig spa, a session with a dog psychic and a story about rats wearing tuxedos.  

And no, I'm not making this up. 

The pig spa is my favorite.  

According to an MSN article, it offers:

"38 swine suites with private pools and lanais, concierge service, exercise facilities, room service, and, of course, maid service (because these guests are total pigs)." 

This raises the question of what does a pig concierge do?  Theater tickets?

That this show exists is a clear signal of the growth of the pet humanization trend.

We expect this trend to increase in importance due to aging boomers looking for companionship and the growth of households without kids.  

I'm somewhat depressed to tell you that National Geographic is the show's producer. One of the world's largest and best known non-profit organizations, their tagline is "Inspiring People to Care About the Planet".

It's good to see they aren't willing to dilute their brand and mission just to make a few bucks of advertising revenue.  

Despite these problems, there's been a flurry articles on entrepreneurs partnering with foundations and grassroots organizations to rebuild the once great city.  

These include:

How a Young Community of Entrepreneurs is Re-Building Detroit: from Fast Company, it covers some of the many entrepreneurs attempting to build businesses in Detroit.  

My favorite quote from this article is:

"Where everything's broken, anything's possible."

This article also provided the chart on the right.  

A Missionary's Quest to Remake Motor City: from the NY Times, it covers the extensive investments and efforts being made by Quicken Loan founder Dan Gilbert to revitalize downtown Detroit. Gilbert has spent over $1 billion buying and renovating downtown commercial space.

An urban affairs expert says his efforts "amount to one of the most ambitious privately financed urban reclamation projects in American history."

Detroit Shows Way to Beat Inner City Blues: authored by the noted cities expert Richard Florida, this Financial Times article says Detroit could be a model for future urban turn arounds.  Key quote:

The nascent turnround is driven by a coalition of profit-led entrepreneurs, philanthropic foundations and grassroots groups unhindered by city government. They offer a distinctive model of revival from which cities in the US and beyond can learn.

Struggling Cities, From Detroit to New Orleans, See Startups as Saviors: from Business Week, covers how a variety of cities are turning to entrepreneurs, startups and small businesses to help revitalize downtown cores.

It's of course way too early to know if Detroit can recover. But it's exciting to see private industry and entrepreneurs working to revitalize this city. 

The key quote comes from Mark Gilbreath, CEO of workspace marketplace LiquidSpace:

"Hotels implicitly are in the business of space; they are extraordinarily efficient at providing space on demand. The next logical step is to broaden the brand as a place to work, not just a place to sleep."

The article mentions two chains.  Marriott has introduced Workspace on Demand, an online collaboration with LiquidSpace that allows users to book Marriott workspaces across the country on an hourly basis. 

Marriott is also testing a concept called Workspring in collaboration with furniture company Steelcase. Currently only available in a couple of hotels, Workspring provides a sophisticated set of meeting spaces with high end furniture and amenities.

Westin is also testing an office concept called Tangent at Westin. Currently only available at two locations, Tangent provides upscale meeting space for small groups.  

Many other hotel chains and independent hotels are also starting to cater to mobile workers and those in need of meeting spaces - which is good news for the growing number of mobile workers.

A spurious correlation is a statistical term that describes a relationship between two variables that seem to be related (correlated), but happens just by chance or due to an unseen third variable.  

A good example of an unrelated spurious correlation is skirt length theory. This is the belief that stock market trends follow the length of women's skirts. Followers believe when skirts get shorter, the stock market goes up.  When they get longer, it goes down. 

Skirt length theory has been proven to be wrong, but since it works some years (it has a 25% chance of being right in any given year) it continues to have followers.  

An example of a spurious correlation caused by a third variable is the fact that ice cream sales and accidental drownings are highly correlated - they tend to both move up and down in a consistent pattern. 

In this case a 3rd variable - temperature - is the driver. Hotter days result in higher ice cream sales and more people swimming - and, unfortunately - more people drowning.  

Why does this matter?

If you make decisions based on spurious correlations or assume statistical significance where there is none, you will quickly get in trouble. Since there is no causal linkage, the relationship can break down at any point. Going back to skirt length theory, if you bet on the stock market using it you're going to get wiped out.  

It's beyond the scope of this blog to fully cover this topic, but there are two new books well worth reading that do cover it:

Naked Statistics: Stripping the Dread from the Data does an excellent job of describing the basics around statistical causation and the limitations of statistical analysis in layman's terms.

The Signal and the Noise: Why So Many Predictions Fail - but Some Don't is from NY Times rock star statistician Nate Silver. He successfully called the last presidential election and his book covers nicely covers the strengths and weaknesses of statistical analysis.  

In addition to these books, Hubspot's article A Marketer's Guide to Understanding Statistical Significance covers A/B testing, which is widely used (and mis-used) in online marketing.  

Basic statistical skills and understanding is becoming a business requirement. This does not mean you have to be an expert in the field, but if you don't know a mean from a median it's time to learn.  

It's a broad based study looking at a number of issues related to the contingent workforce. But I most liked the chart below, which shows the reasons companies use contingent talent.

As is clear from the data, flexibility is one of the key reasons firms use contingent workers. They allow firms to quickly and easily staff up and down as needed. Contingent workers also don't add to fixed costs.

This last point - that traditional employees add to fixed costs - is a relatively new issue. It wasn't that long ago when employees were not considered fixed costs.  This is no longer true.

Because business conditions shift a lot quicker than they used to, cost committments that last more than a year are now considered fixed costs (5 years used to the norm for fixed costs). And because it's gotten harder to fire or lay-off traditional employees - especially quickly - more firms are viewing employees as fixed costs.

This is an important shift because businesses large and small are increasingly focused on reducing their fixed costs.  We call this the shift to a variable cost economy.  

The trends driving the growing interest in contingent workers are accelerating, which is a key reason we're forecasting that roughly 40% of the U.S. private workforce will be contingent by 2020.

They suggest that an emerging economic gender gap favoring women is developing. This gap is being driven by the underperformance of boys and men in school.

Key quote fron the study:

" ... the stagnation of male educational attainment bodes ill for the well-being of recent cohorts or U.S. males, particularly minorities and those from low income households. Less-educated males of recent cohorts are likely to face diminished employment and earnings opportunities and other attendant maladies , including poorer health, high probability of incarceration, and generally lower life satisfaction."

In other words, men and boys are in trouble.  

The key chart illustrating this point is below. It shows that women's wages have increased substantially more than men's over the last couple of decades. More importantly, men without college educations have seen their wages fall over this time frame.

Before you send me an email, yes - men still out earn women on average. 

But the gap has significantly closed over the last 2 decades and we are forecasting earnings parity between the sexes will occur within the next decade.  We also believe women's earnings growth will outperform men past that point and by the 2030 time frame women, on average, will substantially out-earn men.

The study points out that the social and economic costs of the decline of men are substantial. As we wrote in our article Missing the Point on the End of Men, we need to recognize the problems facing boys and men and start fixing them. 

Our category on Women has a lot more posts, data and links on both women advancing educationally and economically (which is good), and the decline of boys and men.  

There's a pretty active debate over what's driving this decrease. We covered this last year in our article Workforce Participation: Where's Everyone Going?

We now have more data than last year and the answer is people are leaving the workforce for a variety of reasons, including:

• Younger Americans are staying in school longer
• The number of people on disability is up substantially over the last past decade
• Aging baby boomers are starting to retire
• The number of people on food stamps and other government support programs is up

Even more troubling than the overall decline in the workforce participation rate is the decline among people aged 25-54. These are the prime work years when people generally aren't in school, retired or disabled.  

As the chart below - from the always informative New York Times Econmix blog - shows, for this age cohort the reduction in the unemployment rate is almost fully explained by the decline in workforce participation.

This is a huge problem for America. Not only does lower workforce participation mean lower economic growth, it also raises government spending on support programs and leads to greater participation in the informal (meaning illegal) economy. It's also bad for the people who aren't working.

Unfortunately, there are no easy answers to this problem.