Elon Musk bets on humanoid robots. He plans to deploy thousands of them to get things done on the assembly lines of Tesla factories. Apparently, the company has been struggling with the same production slowdowns faced by many of our customers in the manufacturing sector due to global labor shortages and supply chain delays. But making factory robots is not his big project. He plans to put Optimus robots in our homes, cook dinner, take care of elderly parents, etc.
Whether that actually happens remains to be seen, but either way, now is a great time to be an innovator. According to a study by the National Center for the Middle Market, middle-market businesses are seeing record year-over-year revenue increases and experiencing job growth, despite labor shortages. And those with digital vision and acumen are among the most successful.
We certainly see this with our customers. Many middle-market companies that have been forced to innovate during the pandemic have taken the ball and run with it. Today, they are embracing R&D like never before, whether they are in construction, healthcare, real estate or manufacturing. Half of the respondents to our National Manufacturing Survey 2022 said they leverage technology to drive innovation and improve quality. It doesn’t hurt that the R&D tax credit, which became permanent in 2015, gives businesses a dollar-for-dollar incentive.
Most owners are also well aware that building an IP portfolio adds value to their business. Private equity firms and other investors have been on a buying spree over the past couple of years, and they’ve been buying up midsize companies, especially those with valuable intellectual property. This opens up many opportunities for entrepreneurs to step out and move on to the next chapter of their lives.
Of course, not all innovations end up being successful. Ask Mark Zuckerberg, who is licking his wounds after losing $71 billion of his net worth when Meta (formerly Facebook) stock plummeted, due to lack of interest in the Metaverse. He’s not the only Founder to experience an epic facial plant like this. The history of entrepreneurship is filled with good ideas that didn’t quite work out as expected.
That said, there’s nothing more exciting than coming up with a new product or service that fills a gap in the market. Our early adoption of AI and RPA (Robotic Process Automation) was an exciting window into what is becoming a new normal of business operation. You won’t see robots roaming the Marcum offices anytime soon – accounting is, at its heart, a people business. But innovation will be at the heart of how we operate, deliver exceptional customer experiences and build for the future. As Elon Musk keeps reminding us, technology isn’t slowing down for anyone.
I’m writing this column this week from a hotel room in Las Vegas, while attending an industry conference. If Las Vegas is any indication, the president was right when he declared the coronavirus pandemic last week on 60 minutes, at least that’s how it goes here in Sin City. The hotels are full, the casinos are packed, there’s not a mask in sight (well, maybe a handful). And if it’s not over, I hope what you get in Vegas stays in Vegas.
Sunday evening is the start of Rosh Hashana, the Jewish New Year. The Shana Tova to those of you watching.