posted on October 22, 2010 13:59
Something that I am finding these days both troubling and inspirational at the same time is the concept of the "New Normal". You may have heard of folks in the media talking about how people, households, and businesses will have to adjust their expectations downward because many are predicating a slow recovery as we come out of the Great Recession. Some economist are saying that businesses need to get used to slow growth in earnings; that people need to get used to making less money; and households will have to get by with less. What I say to this is HOGWASH. I say let's all get used to the New, New Normal. Here’s what I mean.
Every time the United States has come out of a recession, and certainly the previous two recoveries that I have personally experienced, economic growth has been driven by:
Innovation by entrepreneurs
Increases in productivity driven through innovation
Small and medium-sized businesses creating jobs
Small and medium-sized businesses growing into global superpowers
Think about all the innovation we have had coming out of the early Nineties' recession and the recession of the New Millennium. In the early Nineties, we had the savings and loan crisis putting enormous strain on the financial system and the Federal budget. At that time all of the conventional wisdom said that the rapid advances in technology would drive productivity down in the economy, resulting in years of lower economic growth. It was thought that rapid increases in technology would mean that it would take less workers to do a given job and that we would have a "Jobless recovery". But instead –the technology of the Nineties created a whole new class of technology workers entering the economy, including application developers, system administrators, website and UI designers, and system engineers, to name a few.
As a fallout of the savings and loan crisis of the late eighties and early nineties, it was also thought that without all of the savings and loans institutions, which were the largest source of mortgages at that time, the housing market would not survive. Look at how wrong the conventional wisdom was at that time. Instead of the predicted gloom and doom, the nineties brought unprecedented growth brought about by the socializing of the personal computer and the internet.
In fact, the economy was so good that the prosperity led to the technology bubble in the late Nineties that ultimately reached a peak when the technology bubble burst, with the resultant spillover leading to the subsequent New Millennium Recession of 2000 and 2001.
But again after 2001 and just like the Nineties, advances in productivity, as technology continued to advance, drove productivity increases and created a new post-recession economic expansion. In that expansion, large businesses began absorbing the advanced technologies into their supply chain resulting in increased efficiency, decreases in time to market, and expanded lines of business. Nonetheless, all good things must come to an end and the New Millennium’s expansion was punctuated by the Great Recession, brought on by the mortgage crisis -- not too unlike what brought the Eighties economic expansion to an end.
Just like every other recession of the past twenty-plus years, the conventional wisdom is that the "New Normal" means we should all be happy getting by with less. We should not be reaching for the stars. We should not be dreaming up new technologies that create all new markets. We should not be expecting that we can create additional business value. We should not expect that the next generation will be better off than we are.
To be honest, that sort of mass negativity in no way bothers me. Because just like every other recovery of the past twenty-some years, those who are adept to change, utilizing advances in technology and other innovation to make clients happy, and pushing the envelope on new technology, will lead the economy from malaise to prosperity.
Based on what I have seen in previous recessions I have a few observations to maximize business and career opportunities today.
Be your own entrepreneur. We all of have the opportunity to be entrepreneurs. Whether you are one working or have been laid off I always encourage people to behave like entrepreneurs. This can mean conserving company resources by treating corporate spending like it is your own money. This can also mean coming up with new ideas for increasing productivity or providing new business value to clients.
Be innovative, make mistakes. As the economy is turning around, this is definitely the time to be innovative. Innovation can be used to help things run more efficiently internally and to provide better and more creative solutions for clients. But notice that I didn’t say above "Don't be afraid to make mistakes".
Don’t complain, fix it. If you want to spend time growing your business and career rapidly in this economy, there is no time for problems, only solutions.
Invest in human capital. It is my point of view that now is the best time to invest in people. Whether it is through professional development assistance or a formal appraisal process, take the steps to invest in yourself and invest in your company’s people.
Just like it was hard to conceive the impact that microchips, the personal computer, and the Internet would have on us over the past twenty years, it is hard to imagine what new innovations, hard work, and entrepreneurial spirit will have over the next twenty years. But one thing is clear, the impact will be substantial.