..is small beautiful yet?

As a child, my father casually shared a book with me that I wrongly dismissed as one of his ideological fantasies. Twenty years later, in the modern economy where AI is quickly blurring the line between fiction and reality with no signs of slowing down, I find myself revisiting E.F. Shumacher's, "Small is Beautiful".

The work inspired a generation to question corporate dominance and is more relevant now than ever as a guiding principle for employing responsible AI in today's economy; as AI can be a catalyst for grassroots empowerment.

AI lets companies find their sweet spot

Something that’s fallen between the cracks in the polarizing discussion of AI's implications for the future of work, is how size matters more than ever.  

On one hand, you have large corporations downsizing (>500k US layoffs in 2025 so far), and on the other you have the start-up world booming with a new "golden age”... all while entry level opportunities and job security are being crushed, changing the trajectories of billions of people.

A clear shift in labor allocation is happening.

With bloated corporations desperately trying to control costs through short-sighted staffing cuts and hand-wavy attempts at AI!, small business or self-employment (or SMBs, as I’ll refer to them moving forward) are becoming the only option for economic security for more and more people.

Most workers in the developed world are employed by small businesses (>90% of employers). SMBs are the real economy, but they don’t generate as much of a country's GDP as corporations, particularly in tech-dominant economies like the US where SMBs contribute less than half of GDP, while being 99.9% of businesses. But corporations have been in decline for decades, largely thanks to technology, and as YC thought leaders pointed out, we are in a long and inevitable period of "re-fragmentation".

It's tempting to fall into the cynical view, blaming corporate greed as the core cause of inequality in our modern world and just accepting that self-defeating narrative. However, today we have the opportunity of a lifetime to bring equality back into our economy. By strategically using AI to empower SMBs, they can compete head-to-head with corporations and gatekeepers, both in terms of control and influence.

Putting things another way, over 90% of a nations' business decision-makers are SMBs, and though that may not be reflected in economic power (yet), if they can scale using AI, that will change.

True democracy requires economic decentralization

Democracy and Decentralization are loaded terms today (thank you, government corruption and crypto scammers). However, if we put recent biases aside and get back to the principles for which these word stand for, perhaps we can learn to appreciate their beauty again?

Instead of relying on archaic processes in government, why don't we prioritize exercising our free speech through the economy? Let's not snag on politics; my point is simply that voting with your wallet is a much safer bet.

But how can we "vote" (using our wallets) with integrity if our options are limited to cheap/available corporate offers and expensive/inaccessible small business offers?

That's the point, you can't. For much too long, we've had (many) systematic issues that create an unfair playing field – in fact this was pointed out as early as the 70s by Schumacher, that “appropriate-scale" is more effective and fulfilling, than blindly pursuing growth. This has continued to echo and be refined upon over the decades, such as in McKibben’s “Deep Economy” or more recently Raworth's "Doughnut Economics" which navigates modern social issues like inequality and climate change.

‍"The aim ought to be to obtain the maximum amount of well-being with the minimum amount of consumption.” - E.F. Schumacher, Small is Beautiful

To compete in the labor market with big incumbents, SMBs need: more cashflow, more opportunities, more attractive salaries, more work-life balance, more stability, and more influence. The public is voting louder and louder with their wallets against big corporations and for an emerging collective of diverse, modern SMBs that empower and share responsibility for their communities. But how?

What's blocking SMBs from being AI's big winners?

AI is a natural catalyst for scale issues commonly facing small businesses and self-employed people (limited talent, cash, time, or distribution). I’ll leave the common issues for large organizations to your imagination – but ask yourself, would AI really help?? In fact, the structural advantage AI gives SMBs has been articulated and approved by a peer-reviewed body.

Modern SMBs are leveraging AI rapidly, scaling to comfy numbers with just a fraction of the resources of the previous generation - ex. sustainable 1-100 person, $1-100M/yr revenue business, powered by a focused, aligned team. By using AI tools to scale their people rather than replace them, this next generation of SMBs can achieve the best of both worlds; achieving financial advantages while preserving company culture, giving back to the local community, and keeping operations aligned with real-world outcomes (not just stock prices).  
According to forecasts in consumer robotics, prediction markets, and various other emerging tech indicators (not to mention socioeconomics and global affairs), the economic seasons are clearly changing, the saeculum is turning, the next Woodstock is coming... but too many are either sleeping-on the changing world order, or in a state of FUD (fear, uncertainty, doubt) and inaction.

The time for action is now, but how can we make building a successful business more accessible? How can we empower more people to succeed, beyond the lucky few who already have the skills, money, and connections? How can we foster another, larger generation of leaders in an economy that neglects training, mentorship, and long-term thinking?

As technology continues to accelerate, so too does competition, and although more people are interested in self-employment today, most don't know where to even start and are intimidated by what looks like a saturated market. From afar, it looks like everything has already been done... yet early startup profitability is better than (almost) ever. And not only are they scaling faster, but they are achieving operational efficiency and keeping control with trends like "seed-strapping" (only a single round of funding) and the VC stepping back to nurture their older, later-stage investment companies.

So if you have a side project or are at least brewing on an idea... what's limiting you? With increasing warnings nowadays from AI industry leaders like Anthropic warning that 50% of white-collar jobs can be automated by 2030 - maybe its a good idea to get ahead of the curve.

Yes - that's not only hard/risky/scary... its unclear. The internet is full of long, static, general resources: confusing government websites, clickbait social media “advice”, and overpriced consultants with weaning expertise. Too often, it feels like rummaging in the dark, where everything you find is unclear and lacks context.  

Thanks to AI, the problem today isn’t so much in the how of tasks anymore - but in the what. There is no shortage of AI tools to pump out content or emails... but how do we figure out what to focus on and the big picture? How do we get into the right mindset and map our way to success, to reach a position to leverage all these AI tools?

Regardless of your views on the ethics of AI, we can agree that AI has unlocked a new level of guidance for everyone. But while you can often get decent pointers to your first steps on a startup from ChatGPT, steps 2-1000 are still on you. In our post-information age, taking the action are more important than ever.  

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