The Do-It Yourself Economy
This is a paraphrase of an excellent article by Thomas L Friedman in the New York Times a few days ago. (Friedman is the author of The World is Flat)
"In case you haven’t noticed, the
The “good news” is that the Great Recession is forcing companies to take advantage of the Great Inflection faster than ever, making them more innovative. The bad news is that credit markets and bank lending are still constricted, so many companies can’t fully exploit their productivity gains and spin off the new jobs we desperately need. The Great Recession forces companies to radically downsize, but the Great Inflection has made them radically more productive.
The writer cites an example.
A marketing agency in
But the issue is this. Not many new jobs were created neither was significant profit generated. For that, the economy needs to pick up and credit needs to become more freely available. Given successful companies are now in a new state of "hyper-efficiency" any uptick in business would really improve the bottom line, generate cash and stimulate hiring, but that requires credit markets to loosen for customers and clients.
Strange times: The Great Recession and Great Inflection are making our companies ultra-lean, innovative and productive. But with credit still constricted, the economy is like a superfit track star with a weak heart. Getting credit pumping to the industrial muscles again must be the top priority."
December 18, 2009 11:40 AM | Permalink