Small businesses are meeting the challenges of a changing economy and leading the way in production and job creation. Small businesses especially will continue to benefit from demographic and societal shifts, in particular the emergence of the two-career family that fuels the service industry. Women and minority persons are the newest entrepreneurs. Often disillusioned with corporate jobs, they bring to small businesses new workplace priorities that include flexible work schedules to accommodate family obligations and personal growth. The elderly population is also affected by small businesses, both as a labor source and as an untapped market. Small businesses help lessen unemployment; however, in some areas small businesses are hard-pressed to find workers. A challenge to small businesses in the future will be finding and keeping enough good workers. Government leaders recognize that small businesses are good for the economy and have begun to lighten the burden of regulations and taxes to promote these businesses. Banks also are more interested in working with innovative enterprises than formerly. Although small business owners of the future will have to tackle such problems as labor shortages, rising personnel costs, and escalating competition both domestically and abroad, the outlook remains optimistic. (KC)