Companies turn to new and innovative solutions to problems for a variety of reasons:

•   Current Methods Have Stopped Working
•   Competitors Have Already Moved To The New Tools
•   The New Way Is Better And/Or Faster
•   The New Way Produces Measurable Quality Improvements
•   Money Can Be Saved
•   The New Way Is Better Because It Is New.

In the Human Capital sector, market evolution is typically slow. Phenomenon like the rapid adoption of online Recruitment Advertising (which took about six years for initial penetration) are rarer than the slow and incremental evolution that most innovations face in market adoption. Investment in the industry, for fast paced winners, has a five or six year timeline. Many of the companies that will produce the most significant returns to investors do it on a decade-long time line.

That means that patient investors with a long-term commitment are required to build the profitable structures of the next generation. Holding non-liquid investments over a ten-year period is not an investment approach that many institutions are interested in pursuing. In general, the stock market produces returns on a quarter to quarter basis and that is 40 times faster than we are talking about here.

However, there is a well-established and growing market that has been inadequately protected by the incumbents who currently own the business. Historically, their efforts to control their eroding market position have bequeathed significant benefits on new entrants. One can nearly navigate a new venture by simply not doing what the incumbents do.

Of course, we are talking about the newspapers.

The most significant opportunity comes by understanding exactly what the newspapers are missing. Their readers (users) have become (and/or are becoming) proactive owners of their own destinies. By taking the time and patience to understand what those readers actually want, an extraordinary harvest is possible.

The demographic crisis, which we describe in the context of its relatively short-term consequences in the employment market, has even more significant long-term implications. In an economy where the average age is 60, young employees will have no alternative but to attempt to maximize the middle of their earning years. That means that over the next decade, younger workers will increasingly treat their involvement with a company as an investment. The tools, infrastructure and mindsets required to manage this change of behavior are virtually non-existent today.

The implications of Salary.com's Personal Salary Report are far reaching and multiply over time. Now, for the first time ever, Human Capital can be valued at the individual contributor level in an overall market context. This is an amazing step towards a free market in labor.

Timing is everything, of course. Market readiness, relative ramp rates, unforeseen political or military crises, or extreme market conditions will shorten or lengthen the time it takes for the generational change to take hold. It is predictable within bounds.

This emerging workforce ethic and its consequential structures are no different than the general changes that have taken place in the workforce over the last 100 years. A non-discriminatory environment, 40 hour work weeks, compensated overtime, casual dress, desktop computing, measurable quality, project orientation and long commutes were all unthinkable 100 years ago. Many were unthinkable 20 years ago.

The demographics are relentless.

The detailed opportunities we describe in the following sections have variable horizon lines as well. They can be scaled into huge enterprises or managed as small operations. As is always the case, early stage companies either grow or produce profit. The difference is a decision involving the focus and objectives of the enterprise. In the early days, when the foundation for greatness is being developed, the pressure from investors is often to forego growth to produce cash. Significant investment returns, as is always the case with compound interest equations, involve patience and deferred gratification.

* Excerpt from the 2002 Electronic Recruiting Index.

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