Traditionally, ICT firms segment the market into business and consumer sectors, with the business market being further subdivided into enterprise, SMEs and microbusinesses. In the last few years though, a new type of tiny business has emerged that sits between the consumer and business categories - the nanobusiness.
Industry analysts Omnisperience defines a nanobusiness as a business that employs less than one full time worker. While that might sound counterintuitive, it covers all those businesses that people work on part-time or which have a high level of automation which means they require only intermittent human intervention. In fact, the individual sectors of the nanobusiness economy are well known and well established - comprising the Gig Economy, Sharing Economy, Creative Economy, Influencer Economy and microretailing - but it's only when we put these sectors together that we realise just how huge the nanobusiness market truly is.
What nanobusinesses all have in common, though, is their usage of digital platforms to enable individuals to sell their goods, creativity, services, labour or influence, to rent out something they already own, or to work as a microretailer. The category includes those grey area where work and play overlap, and hobbies are monetised for financial gain. Many of the people working in this sector juggle more than one nanobusiness, or a nanobusiness and traditional employment, in order to utilise all their time and maximise their income.
The rise and rise of the nanobusiness sector
So what's the big fuss? If these are just tiny businesses, why should anyone be bothered?
Individual nanbusinesses may indeed be tiny, but in aggregate they offer a significant opportunity. If we take just one part of the nanobusiness economy - the Gig Economy - this is growing so rapidly that 36 per cent of US workers are now involved in it (Gallup), as it continues to expand at three times the rate of the rest of the US economy (Forbes). Meanwhile in the UK, 4.7 million workers are now participating in the Gig Economy (TUC). The World Bank estimates that in Asia, 26 per cent of workers in Malaysia are freelance, rising to 50 per cent in Indonesia.
Many service providers are missing out on revenues from this sector because of their simplistic, rigid and traditional way of segmenting the business market. This sees them viewing households purely as a consumer market, rather than understanding that they have become an engine of entrepreneurship and now have other ICT needs. Instead of maximising their revenues from households, they're handing off revenues and margins to third-party SaaS companies. This is also unsatisfactory for households who would prefer complete ICT solutions rather than having to buy the technology they need piecemeal.
Nanobusiness sector is vital to Covid-19 recovery
The nanobusiness sector is particularly important to global economic recovery post Covid-19 and to the recovery of household finances in particular. This is because it provides opportunities for individuals to monetise their skills, time and resources – adding much-needed additional income to households. When households are able to pay down debt and feel the confidence to begin spending again, this will also stimulate the wider economy. That's why nanobusinesses are set to be the catalysts for economic recovery.
Four sets of workers in particular will benefit from the nanobusiness opportunity:
- The unemployed – providing opportunities to get them working again.
- The underemployed – helping them fill up their spare time to make more income.
- The flexitarians – workers that are seeking more flexible working arrangements because of their domestic or life circumstances. This might be because they need to look after children or elderly relatives, or because they aspire to be semi-retired, or because the time they have available to work is periodic (for example, students).
- The shortfallers – because it provides additional income to households that have fallen into debt or who are living paycheck to paycheck and struggling to make ends meet.
Why nanobusinesses are important for the ICT sector
There's a huge opportunity for ICT firms is to better target and support these workers by providing them with the services they need to engage in this dynamic sector. At a simplistic level this boils down to connectivity but, depending on the type of nanobusiness, there are a wide variety of value-added ICT services that such workers need. Monetising this opportunity, however, requires service providers to be able to understand and target the opportunity accurately. For example:
- nanobusinesses rely on their mobile devices as essential tools to sell their labour, goods and services, and to connect with customers. They also need a host of other ICT services to enable them to create, deliver their services and run their businesses
- bigger businesses that want to utilise the services of nanobusinesses require communications, collaboration and cloud-based solutions to acquire and manage the skills they need from nanobusinesses, distribute work, and organise workers from anywhere in the world.
Instead of selling technology such as 5G or FTTP, ICT firms should take a more customer-centric approach and focus on what customers do with technology building blocks to create profitable, configurable solutions that address nanobusiness needs. Importantly, to be profitable, such businesses need to be supported in a highly automated fashion using self-care, self-provisioning and even self-configuration.
The advent of the nanobusiness market clarifies the opportunity as the side gig goes mainstream. Nanobusinesses will continue to break down the barriers between work and play, liberate labour and services from location, and drive new forms of flexible working that allow people to work when it suits them. They are opening up new pools of workers who previously found it hard to work in a more formal environment, and increasingly this isn't just students and parents balancing childcare, but the Silver Workforce that wants to continue working beyond traditional retirement age. In short, nanobusinesses are here to stay and will form an increasingly important component of the future of work. The only question is: are you geared up to support them and to benefit from the opportunity they present?
Teresa Cottam, Chief Analyst, Omnisperience