One can never expect to know everything, for sure, but even understanding that, I am still surprised when I come across an economic term that is unfamiliar to me – Middle-market manufacturing.     

  • In commerce, middle-market companies or midmarket companies are generally those companies with revenues between US $5 million and $3 billion per year. The wide range is due to the fact that there is no precise definition of the term. Some finance professionals might consider the mid-market to be $100 million to $3 billion, while others consider it to be $5 million to $500 million. In either case, it does not include “main street” or smaller businesses like the corner store.

After reading the above, I realized I intuitively knew this segment of business – I just did not know it has a definitive name. In any case, I came across this term in an article about job growth in this sector, or lack thereof due to advancing technology.  

  • Research shows that advanced manufacturing has great potential to spur economic growth without infringing on employment. What’s more, middle market advanced manufacturing is expected to grow substantially in the near term.

Point being, technology is not a job killer; it actually spurs economic growth, which creates jobs, just as small business (a term I do know) creates jobs, lots of jobs. And to that point, we have the following data point that contrasts sharply with the dire headlines coming out these days about the US economy.

  • U.S. small business confidence increased in April with owners in the energy field surprisingly bullish about capital expenditure and hiring plans, further supporting views that economic growth was rebounding after a dismal first quarter.

Confidence is about the future, and the above suggests that in general, the US economy will retain its momentum, despite the lagging indicators suggesting otherwise. It also suggests that the small, independent oil producers in the US are not being crushed, as the breathless media would have you believe. Keep that in mind as you contemplate the future price of oil.

As to the small business component, take a look at this US small business, and what it is doing to cut a slice out of the mobile market, you know, the one the Millennials dominate.

  • US mobile network operator FreedomPop is bringing free mobile plans to the UK. The company will launch a basic, SIM-only, contract-free plan with 200 minutes, 200 texts and 200 MB of data for free this summer, the BBC reported.

This is an interesting capitalistic response to the big dogs, such as Verizon, who, I might add, is not cheap.

  • FreedomPop is a bold experiment: It’s a mobile broadband provider, using Sprint/Clearwire’s 4G networks, that offers a free, basic-service tier – 500MB, every month, free and clear, with higher-usage tiers available at extra cost.

Sprint is a fine network, not as large as Verizon, not by a long shot, but it is still substantial. So, it will be interesting to see how FreedomPop does over the longer term, as it now claims over 1-million US customers, and of those customers, 51% use the basic free service and 49% buy the extras, which is where the company makes its money. The CEO, Stephen Stokols, founder of Skype, claims the company only needs 30% of its customer base to buy extra services to make a profit, so, it would appear they are making a profit.

The question becomes: can they attract enough customers with their limited coverage on the Sprint network, as compared to Verizon?

Speaking of technology … Here is yet another fascinating look at a slice of humanity that would rather expend valuable energy doing bad things, rather than good.

  • Thieves are turning iPod Nanos into spy cameras to steal cardholder PIN numbers at ATMs.
  • The iPods, modified with false fronts to hide the device from users of the targeted cashpoint, record PIN numbers as the victim tries to take out cash, Security Affairs reported.
  • Once the PIN has been captured, criminals use a piece of plastic planted in the card slot of the ATM to block the user’s card. When the victim wanders off in frustration, the thieves retrieve the card and use the PIN number recorded by the iPod to take out cash.

The approach is fairly ingenious, for sure, but a lot of time and work for an unknown amount of money, unless of course, the thieves are targeting ATMs in Beverly Hills. If only these creative thinkers would start a small business with a positive bent.

Trade in the day; invest in your life …

Trader Ed