Top banking executives and economists are sounding the alarm: The U.S. and global economies are likely headed for a recession in 2023.
More than 1 million private companies opened between March 2021 and March 2022. But how many will survive if a recession hits? And which industries have the highest likelihood of success? Though the labor market conditions continued to improve, economists say it would be highly unusual for the U.S. job market to remain unscathed in a recession.
Using 22 years of Bureau of Labor Statistics historical data, Growthink identified the 10 industries with the highest business survival rates. About 19% of private companies founded in March 2000 were still operational by March 2022. Survival rates for all of the top 10 industries surpassed that average. Growthink determined the number of surviving companies in each industry and how many jobs the industry creates.
Keep reading to find out if you’re in an industry likely to survive a recession—and survive long-term..
– Survival rate since founding in March 2000: 20.7%
– Total surviving establishments: 5,086
– Total employment of survivors: 212,449 (42 employees per establishment, on average)
The manufacturing industry includes jobs associated with creating new products from raw materials or assembling components to create a new product. Workers in warehouses, factories, plants, and mills are part of the manufacturing industry. The level of education required for a career in manufacturing varies widely from one position to the next. Though machines have automated many manufacturing jobs with the advance of technology, companies will always need employees on the assembly lines to ensure smooth operations.
#9. Health care and social assistance
– Survival rate since founding in March 2000: 20.8%
– Total surviving establishments: 17,483
– Total employment of survivors: 345,809 (20 employees per establishment, on average)
This type of business includes employees of companies that provide health care, food assistance, social services, vocational rehabilitation, and child care. This industry includes hospitals, physician’s offices, medical laboratories, youth and family centers, hospice care, and elderly care homes.
Many positions in this industry are staffed by trained medical professionals with at least some higher education requirements. This is the fastest-growing sector of the U.S. job market, employing more than 18 million workers. Four in 5 health care positions are held by women.
This industry may require nontraditional work hours and expose employees to stress, patient violence, and potentially dangerous medical conditions.
#8. Educational services
– Survival rate since founding in March 2000: 21.6%
– Total surviving establishments: 1,378
– Total employment of survivors: 39,648 (29 employees per establishment, on average)
The United States is grappling with a nationwide shortage of educators. Declining college enrollment in teaching programs means the demand for employees in this sector will continue to grow. Many factors are to blame for the current staff shortage in the education industry. The politicization of curriculum, frustrations over standardized testing, soaring class sizes, low pay, and limited resources top the list of complaints by workers in the education industry.
The positive news is salaries in education are slowly rising across the country. Salaries in education vary widely depending on the position and level of experience but range from under $30,000 to over $100,000 annually.
Some of the most in-demand positions in this industry include teaching assistants, school administrators, K-12 school teachers, occupational therapists, and interpreters.
#6. Finance and insurance (tie)
– Survival rate since founding in March 2000: 21.7%
– Total surviving establishments: 8,598
– Total employment of survivors: 156,531 (18 employees per establishment, on average)
This business sector includes companies and positions involved in financial transactions or insurance services. Workers in these companies include financial managers, personal financial advisors, insurance sales agents, customer service representatives, and tellers. On average, employees in this industry work 43.4 hours weekly.
It’s one of the three highest-paying industry subsectors in the country, with an average salary of $96,211. The Bureau of Labor Statistics reports that 6.31 million people were employed in this industry in May 2021, and the numbers continue to grow yearly.
#6. Real estate and rental and leasing (tie)
– Survival rate since founding in March 2000: 21.7%
– Total surviving establishments: 5,508
– Total employment of survivors: 46,097 (8 employees per establishment, on average)
This business sector includes companies that rent, lease, and facilitate purchasing and selling tangible assets like homes or commercial properties.
During the height of the COVID-19 pandemic and the prevalence of working from home, many Americans wanted larger homes with a lower cost of living. In attempts to socially distance in the search for the perfect home, virtual home viewings and real-estate closings saw a sharp rise during the pandemic.
There are over 3 million active real estate agents and over 106,000 active real estate brokerage firms in the United States. The average salary of workers in this industry was $54,330 in 2021, an increase from $43,330 in 2020.
#5. Accommodation and food services
– Survival rate since founding in March 2000: 23.9%
– Total surviving establishments: 10,957
– Total employment of survivors: 279,795 (26 employees per establishment, on average)
Workers in this industry provide food and lodging for immediate consumption by consumers. They include people employed at hotels, motels, fast-food restaurants, casinos, RV parks, dining establishments, catering services, bed and breakfasts, and more.
As the U.S. economy has grown over the last five years, so has the accommodation and food services industry. When Americans have disposable income, the frequency with which they travel and dine out rises. Many restaurants and hotels struggled to find employees during the pandemic, resulting in higher wages and sign-on bonuses for many workers.
The market size of this sector was forecast to reach $1.41 trillion in 2022, up from $1.05 trillion in 2021.
#4. Retail trade
– Survival rate since founding in March 2000: 27.0%
– Total surviving establishments: 21,562
– Total employment of survivors: 483,930 (22 employees per establishment, on average)
Retail is the final step of the supply chain in distributing merchandise to the general public; this includes traditional brick-and-mortar stores, direct sales, and the ever-expanding e-commerce market.
Retail sales have steadily increased in the United States since 2009. In 2019, there were 442,597 brick-and-mortar retail stores and 2.1 million e-commerce retailers in the United States. A few job titles in the retail sector include pharmacist, warehouse manager, web designer, head butcher, stockroom worker, and customer service representative.
Wages vary widely depending on the position, but as of May 2021, the median hourly pay for a retail sales position was $14.
#3. Agriculture, forestry, fishing, and hunting
– Survival rate since founding in March 2000: 27.2%
– Total surviving establishments: 1,573
– Total employment of survivors: 34,965 (22 employees per establishment, on average)
This sector includes workers who grow crops, raise animals, harvest timber, and catch fish, whether from a farm or controlled setting or in the wild. Many jobs in this industry require on-site training versus time spent in a classroom. In fact, about 1 in 4 workers in this industry do not have a high school diploma. Self-employed positions, like farming and fishing, account for almost 40% of the workforce in this sector. And more than 3 in 4 companies in this sector employ fewer than 10 workers.
– Survival rate since founding in March 2000: 33.3%
– Total surviving establishments: 290
– Total employment of survivors: 8,799 (30 employees per establishment, on average)
The utility sector includes companies that provide basic everyday needs like water, garbage collection, electricity, and natural gas. Utilities are always in demand, so the industry doesn’t typically suffer during a recession. More than 4 in 5 of the United State’s energy infrastructure is owned by private companies, which are typically heavily regulated by government agencies.
Many positions in this industry require a college degree or advanced technical education. Many of the highest-paid positions in this industry are in various engineering roles. Global demand for renewable and sustainable energy continues to create new positions within the utility industry.
#1. Management of companies and enterprises
– Survival rate since founding in March 2000: 35.3%
– Total surviving establishments: 915
– Total employment of survivors: 52,787 (58 employees per establishment, on average)
The sector with the most businesses that have lasted since 2000 is one that consists of establishments that run other companies that they own or are under contract to manage. Unlike industries categorized by their field of work such as manufacturing or leisure, the management of companies and enterprises industry is one that the Bureau of Labor Statistics differentiates because of their role—this sector manages other enterprises and may not only have a single-store or single-location business within any one field. This is noteworthy because this factors into the typical size of these management companies: This sector accounts for the largest employment rates per company. There are an average of 57.7 employees per surviving business in this industry compared to 12.4 employees at a construction company or 8.4 employees at a real estate company.
As of May 2021, there were 2.3 million people employed in these businesses, in jobs like financial managers, accountants, auditors, bookkeepers, chief executives, and lawyers. The highest-paid positions in this industry are in securities commodities and financial services sales. The industry is projected to have a job growth of 5.4% over 10 years.
This story originally appeared on Growthink and was produced and
distributed in partnership with Stacker Studio.
AI “superusers” seek education, fun, and productivity with generative AI
A look at two separate studies by Sparktoro and Salesforce on people’s generative AI use.
Maybe it was through your job. Or simply out of curiosity.
With the rise of generative AI, you’ve probably tried out ChatGPT or a similar tool. But how often are people using these? More interestingly, what motivates them? Both Salesforce and SparkToro sought to find out with two separate studies.
Here are highlights from each report and how they compare:
Work automation and educational pursuits top priorities for AI users
Both Salesforce and SparkToro can agree on this. SparkToro highlighted professional use of the platform as at an “all-time high,” then ranked categories of interest across over 4,000 ChatGPT prompts with these in the top 5:
- Programming: 29.14%
- Education: 23.30%
- Content: 20.79%
- Sales and Marketing: 13.47%
- Personal & Other: 6.73%
Salesforce found that 75% of generative AI users are motivated by streamlined work communications and task automation. The second highest topic of interest? Technically “messing around” (38%), though a close third was learning and education (34%). Both SparkToro and Salesforce posit that education doesn’t just include homework or university coursework—users also use tools like ChatGPT to develop knowledge of other desired educational topics.
Younger generations more likely to use AI than older ones despite general decline in usage
Salesforce surveyed 4,000 people to find out how they use generative AI and what their demographics are. Turns out, most “superusers” — aka those who use the tool every day — are Millennials or Gen Zers (65%). Plus, 70% of the Gen Z participants surveyed said they use generative AI.
Still, SparkToro notes an overall decline in generative AI use regardless of age. After studying monthly traffic data on OpenAI provided by Datos, SparkToro found overall traffic fell by nearly 30%.
Users ask ChatGPT to write, create, and list
These were the top three common words in SparkToro’s assessment in ChatGPT prompts. However, they also share a notable prevalence of the words “game” and “SEO in prompts as well. Other words less commonly used yet enough to come up in the results included judge, SaaS pricing, curriculum, employment, and employer.
Veronica Ott is a freelance writer and digital marketer with a specialization in finance and business. As a CPA with experience in the industry, she’s able to provide unique insight into various monetary, financial and economic topics. When Veronica isn’t writing, you can find her watching the latest films!
Trends in AI ethics before and after ChatGPT
Computational systems demonstrating logic, reasoning, and understanding of verbal, written, and visual inputs have been around for decades. But development has sped up in recent years with work on so-called generative AI by companies such as OpenAI, Google, and Microsoft.
When OpenAI announced the launch of its generative AI chatbot ChatGPT in 2022, the system quickly gained more than 100 million users, earning it the fastest adoption rate of any piece of computer software in history.
With the rise of AI, many are embracing the technology’s possibilities for facilitating decision-making, speeding up information gathering, reducing human error in repetitive tasks, and enabling 24-7 availability for various tasks. But ethical concerns are also growing. Private companies are behind much of the development of AI, and for competitive reasons, they’re opaque about the algorithms they use in developing these tools. The systems make decisions based on the data they’re fed, but where that data comes from isn’t necessarily shared with the public.
Users don’t always know if they’re using AI-based products, nor if their personal information is being used to train AI tools. Some worry that data could be biased and lead to discrimination, disinformation, and—in the case of AI-based software in automobiles and other machinery, accidents and deaths.
The federal government is on its way to establishing regulatory powers to oversee AI development in the U.S. to help address these concerns. The National AI Advisory Committee recommends companies and government agencies create Chief Responsible AI Officer roles, whose occupants would be encouraged to enforce a so-called AI Bill of Rights. The committee, established through a 2020 law, also recommended embedding AI-focused leadership in every government agency.
In the meantime, an independent organization called AIAAIC has taken up the torch in making AI-related issues more transparent. Magnifi, an AI investing platform, analyzed ethics complaints collected by AIAAIC regarding artificial intelligence dating back to 2012 to see how concerns about AI have grown over the last decade. Complaints originate from media reports and submissions reviewed by the AIAAIC.
SomYuZu // Shutterstock
A significant chunk of the public struggles to understand AI and fears its implications
Many consumers are aware when they’re interacting with AI-powered technology, such as when they ask a chatbot questions or get shopping recommendations based on past purchases. However, they’re less aware of how widespread these technologies have become.
When Pew Research surveyed Americans in December 2022, and asked if they knew about six specific examples of how AI is used, only 3 in 10 adults knew all of them. This includes understanding how AI works with email services and organizing your inbox, how wearable fitness trackers utilize AI, and how security cameras might recognize faces. This low understanding of how AI manifests in daily life contributes to Americans’ attitudes toward this technology. Pew found that 38% of Americans are more concerned than excited about the increase of AI.
As AI works its way into consumer tech, concerns grow to a fever pitch
Concerns about AI initially focused on social media companies and their algorithms—like the 2014 Facebook study when the company’s researchers manipulated 700,000 users’ feeds without their knowledge, or algorithms spreading disinformation and propaganda during the 2020 presidential election.
The viral adoption of ChatGPT and multimedia creation tools in the last year have fueled concerns about AI’s effects on society, particularly in increasing plagiarism, racism, sexism, bias, and proliferation of inaccurate data.
In September 2022, an AIAAIC complaint against Upstart, a consumer lending company that used AI, cited racial discrimination in determining loan recipients. Other complaints focus on a lack of ethics used in training AI tools.
In June 2023, Adobe users and contributors filed an AIAAIC complaint about Adobe’s Firefly AI art generator, saying the company was unethical when it failed to inform them it used their images to train Firefly.
Government, technology, and media emerge as leading industries of concern
While the AIAAIC data set is imperfect and subjective, it’s among the few sources to track ethical concerns with AI tools. Many of the government agencies that have embraced AI—particularly law enforcement—have found themselves on the receiving end of public complaints. Incidents such as facial recognition technology caused wrongful arrests in Louisiana, for example, and a quickly scrapped 2022 San Francisco Police Department policy that would allow remote-controlled robots to kill suspects.
Not surprisingly, many citizens and organizations have concerns about technology companies’ use of AI in the rise of chatbots. Some involving ChatGPT and Google Bard center around plagiarism and inaccurate information, which can reflect poorly on individuals and companies and spread misinformation.
The automotive industry is another sector where major players like Tesla leverage AI in their sprint toward autonomous vehicles. Tesla’s Autopilot software is the subject of much scrutiny, with the National Highway Traffic Safety Administration reporting the software has been connected with 736 crashes and 17 fatalities since 2019.
Chinnapong // Shutterstock
The optimistic case for AI’s future is rooted in the potential for scientific, medical, and educational advancements
As the federal government works toward legislation that establishes clearer regulatory powers to oversee AI development in the U.S. and ensure accountability, many industries ranging from agriculture and manufacturing to banking and marketing are poised to see major transformations.
The health care sector is one field gaining attention for how AI changes may signficantly improve health outcomes and advance human society. The 2022 release of a technology that can predict protein shapes is helping medical researchers better understand diseases, for example. AI can help pharmaceutical companies create new medications faster and more cheaply through more rapid data analysis in the search for potential new drug molecules.
AI has the potential the benefit the lives of millions of patients as it fuels the expansion of telemedicine and has the potential to aid in expanding access to health care; assist with diagnosis, treatment, and management of chronic conditions; and help more people age at home while potentially lowering costs.
Scientists see potential for creating new understandings by leveraging AI’s ability to crunch data and speed up scientific discovery. One example is Earth-2, a project that uses an AI weather prediction tool to forecast extreme weather events better and help people better prepare for them. Even in education, experts believe AI tools could improve learning accessibility to underserved communities and help develop more personalized learning experiences.
In the financial sector, experts say AI warrants a considerable number of ethical concerns. Gary Gensler, the head of the US Securities and Exchange Commission, told the New York Times that herding behavior—or everyone relying on the same information, faulty advice, and conflicts of interest could spell economic disaster if not preempted. “You’re not supposed to put the adviser ahead of the investor, you’re not supposed to put the broker ahead of the investor,” Gensler said in an interview with the New York Times. To address those concerns, the SEC put forward a proposal that would regulate platforms’ use of AI, prohibiting them from putting their business needs before their customers’ best interests.
Story editing by Jeff Inglis. Copy editing by Kristen Wegrzyn.
This story originally appeared on Magnifi and was produced and
distributed in partnership with Stacker Studio.
1 in 5 companies founded in 2021 closed within the year—a story all too familiar in the US
Whether a startup is successful in its first year depends on a variety of factors—from industry type and location to funding and money management strategies. PlanPros investigated what it takes for a business to make it through its first year—a milestone that 1 in 5 companies don’t achieve.
Entrepreneurship is a core tenet of American culture. As many as 55% of Americans have started at least one business in their lifetime, according to a 2019 survey by the Global Entrepreneurship Monitor consortium at Babson College. In fact, there are over 33 million small businesses—which have fewer than 500 employees—in operation today according to estimates from the Small Business Administration. However, the Bureau of Labor Statistics reports that since 1994, about 20% of new businesses have not survived their first year.
The success of a small business affects more than just the business owners’ livelihood. According to the SBA Small Business Facts Report, small businesses are responsible for 2 in 3 jobs created in the past 25 years. Additionally, the SBA estimates that small businesses are responsible for about 44% of all economic activity in the United States.
According to a 2022 Skynova survey of 492 startup founders, 58% said they wished they had done more market research before starting their business. Put simply, market research involves evaluating how likely a product or service is to be received well by its intended customers.
Where a startup is based can have a significant effect on its finances. Business taxes vary across states, as does the availability of various government grant and loan programs designed to aid small businesses. Residents’ purchasing power also ranges geographically. The first-year failure rate for small businesses by state ranged from 18.2% to 36.6% in 2019, the most recent data available—California had the lowest first-year failure rate, while Washington-based startups faced the highest first-year failure rate.
Startups can face certain advantages and disadvantages depending on the nature of their industry as well. According to the Small Business Funding lending agency, small businesses in the health care industry have the highest chance of surviving to at least their fifth year at 60%. Conversely, small businesses in the transportation industry have the lowest chance of surviving through their fifth year at 30%.
Funding and well-managed cash flow
The primary reason new businesses fail is due to a lack of cash or available financial support in its absence, according to the aforementioned Skynova report. In 2022, 47% of startup failures were attributed to a lack of financing or investors, while running out of money contributed to 44% of failures in the same year. A 2019 study funded by the SBA of 1,000 startup small business owners attributes 82% of startup failures to cash flow problems and mismanagement. These data point out the importance of adhering to a strict budget and limiting expenses as much as possible in the first year.
It is also important to identify potential sources of funding or support in advance of any immediate need. This can help prevent running into unsustainable growth. Many government programs exist to help startups survive, including state and federal grants, some of which are designated for certain demographics and industries.
Even after a business is fairly well established, it is important to monitor cash flow closely. Businesses need to survive well beyond just the first year. According to data from the Bureau of Labor Statistics, roughly half of small businesses fail within five years. After 15 years, about 3 in 4 small businesses will have failed.
But the end of a company is not necessarily the end of entrepreneurship for every small business owner. A study by University of Michigan and Stanford economists suggests that business owners who start a second business after their first failures are more likely to succeed on their second attempt.
Story editing by Jeff Inglis. Copy editing by Tim Bruns.
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