What We Can Learn from Recession -- and How It Can Help Us Prosper
Jennifer Hill, an attorney, entrepreneurial advocate and member of our Board of Directors, offers lessons from past recessions -- including the recent Great Recession -- that will propel us to growth in the future.
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My answer? There's a distinct possibility of this occurring -- but the specific triggers and timing are unclear. With the rolloff of the economic stimulus in the United States, overheating issues in some of the BRICs [Brazil, Russia, India and China], the political uncertainty in Middle East and the euro debt crisis (to name a few) plenty of issues could trip the global and the U.S. economies. What's more interesting is that if there is double-dip recession, how will the United States rebound? How quickly? What have we learned to pull out faster and more effectively, so that our standards of living can continue, in the long run, to prosper?
1) Innovation increasingly comes from -- and can occur -- anywhere and no longer has to be located in a "Silicon"-center. Lower costs of non-traditional locales for innovation, if combined with an appropriately skilled workforce, can be a decided plus.
2) Consumer behavior is being increasingly driven by online concepts, which emphasize the distinct characteristics of the individual in the context of a network -- e.g. social, local, mobile, curated content, competition with others (gaming), and virtual rewards (points/coupons).
3) It costs less and less to start a business -- especially in the technology sector (apps being just one example). The cost of failure is correspondingly also lower, which means that companies can iterate faster. In that context, a huge amount of learning is being built up by the next generation of entrepreneurs through these very successes and failures, which will in turn yield new opportunities for jobs and wealth creation.
4) Freelance is for many the new full-time job. Lots of us want a "gig" for personal, professional and financial reasons. The new workplace is therefore more fluid, results-oriented, dynamic and competitive than ever. If there is another recession, companies may hesitate to add permanent headcount, but they are likely to access ad-hoc talented labor pools through the many great online and offline services which exist to mediate this freelancing labor pool. This could become a critical and long-lasting change for the workforce and folks' career trajectories (as well as for the flexibility of the labor market), where more people gather more unique experiences faster, learn on the job more effectively, integrate work and life where both are productive and fulfilling, and work towards optimizing the time-money trade-off at an individual level. It could also create challenges for the older generations and/or those unused or ill-equipped to gaining and maintaining employment in such a dynamic employment context.
Such change creates tremendous opportunities for new business building and "old" business revitalization. However, the benefits of such change clash with the hobbled "social infrastructure" which badly needs fixing: education, health care, energy and urban planning. (Yes, this is a controversial sociopolitical point, but recent travel makes me realize how underinvested we really are.)
This is America. We are a country born of entrepreneurs, so I am fundamentally optimistic that we will figure out a way to pull out of a double-dip recession stronger, more innovative and ultimately changing our way of life for the better. Lead on!