Business Administration and Management

Business is such a broad category, it is difficult to project growth for this field as a whole. It is entirely possible, and even common, for one industry to suffer slow growth or decline while another industry thrives. There are certain trends, however, that affect business as a whole.

Almost all businesses are affected by changes in the economy. When the economy is thriving, consumers have more money to spend, which means that they buy more products and services. When the economy suffers a downturn, however, virtually all businesses suffer along with it, as consumers cut back on spending. During economically unsound periods, many companies lay off or terminate employees in order to stay afloat.

The 2007–2009 economic recession took a huge toll on the U.S. economy and almost every industry. The recession affected the business world with deep salary cuts, massive employment layoffs, and a halt in job growth. While recovery was slow, conditions had improved significantly by the late 2010s. With low unemployment and healthy discretionary spending, the U.S. economy was on strong footing. The United States’ trade war with China, which had caused a slowdown in job growth by August 2019, preceded the beginning of the coronavirus (COVID-19) pandemic in early 2020. The health crisis negatively impacted virtually every industry in some way, resulting in the temporary or permanent closure of many small businesses. As conditions normalized, new challenges emerged following Russia’s invasion of Ukraine in early 2022, which disrupted the global economy. Interest rates increased, making it more expensive to borrow money, and companies and consumers contended with the effects of inflation.

Overall, the Department of Labor expects that employment in all management positions will achieve faster than average growth between 2022 and 2032, creating approximately 1.1 million new job openings each year, on average. As existing organizations expand and new ones are created, the demand for capable managers will rise accordingly. Job growth for financial managers, who are usually responsible for directing a firm's investment activities and setting short- and long-term financial goals, will grow 16 percent, or much faster than the average. Administrative service managers, whose responsibilities may include facilities management and emergency preparedness, and construction managers, who supervise building projects from start to finish, should both experience growth of 5 percent, which is faster than the average. Finally, top executives, who generally hold stressful, competitive positions, will see employment increase 3 percent, or as fast as the average.

In 2023, franchises contended with numerous challenges, including labor shortages, rising interest rates, and inflation. Despite this, the category grew by 2.2 percent, exceeding forecasts of 1.9 percent, according to the International Franchise Association's (IFA) 2024 Franchising Economic Outlook. The organization noted that several factors would make 2024 a year of transition for franchises. These included the impact of artificial intelligence and other technologies, the continued effects of inflation and geopolitical tensions, and the U.S. presidential election. Nevertheless, the IFA anticipated that an additional 15,000 franchises would open in 2024, reflecting annual growth of 1.9 percent and resulting in the creation of about 221,000 jobs. From a financial standpoint, output was expected to increase 4.1 percent in 2024, to $893.9 billion.

For 2024, the IFA anticipated that growth would occur in all areas of franchising:

1. business services
2. commercial and residential services
3. lodging
4. personal services
5. quick service restaurants
6. real estate
7. retail food, products, and services
8. table/full-service restaurants

Another trend that will affect many, if not most, businesses is that of increased use of technology. As every industry becomes more automated, workers who have technological skills become ever more important, and technology-related industries will continue to be an area of rapid expansion. It is becoming increasingly difficult for workers in almost every position to survive in the modern business world without basic computer literacy. In addition, as artificial intelligence and computers continue to cut down on human work, some jobs may be eliminated or combined to reduce costs.

Technology will continue to influence the way business is done in other ways as well. There is likely to be a continuation of the increased use of online commerce via the Internet. Telecommuting and entrepreneurial home-based businesses, too, are expected to continue to increase due to technological advances and the ease of communication between computers.

Recent years have seen some changes in the corporate structure, which may continue. In the last decade, many companies have cut positions in an effort to reduce costs and enhance organizational efficiency. Called downsizing, this trend has the largest effect on middle-management workers, but also creates increased workloads for remaining employees who must take on the duties and responsibilities that were previously handled by workers whose jobs have been eliminated.

Another troubling trend for U.S. workers is the practice of outsourcing jobs to other countries, as technology, globalization, and political influence allow corporations to employ workers outside this country for significantly less money than American workers would be paid. This trend has especially affected workers in manufacturing, but increasingly affects those in other businesses as well. However, by the mid-2020s reverse globalization was occurring as some companies brought work back to the United States, in response to geopolitical tensions and other factors.

Citing results from the Wall Street Journal/Vistage Small Business CEO Confidence Index, the U.S. Chamber of Commerce indicated that small business owners were optimistic about the coming year in June of 2024. More than half (52%) indicated plans to hire additional employees in the next 12 months. Additionally, 62 percent anticipated increased revenues, 49 percent foresaw greater profitability, and 36 percent were planning on making additional fixed investments. Each of these metrics reflected increases of 4 percent from the previous month.