Rich wasted no time in getting right down to business, and delved right into current economic issues and how the relationship between the GDP and aggregate demand show that the country appears to have another two or three years left of this “flat growth.” He took this opportunity to discuss the economic headwinds and tailwinds of this recession. For starters, the headwinds such as residential and commercial real estate numbers dwindling and small business expansion decreasing were signs of trouble that we are facing. However, on the positive, tailwind side of the coin, the global economy outside of the US and Western Europe is strong, the stock market is steadily increasing, interest rates are at all time lows and there are many global companies that have a lot of cash on their balance sheets.
Karlgaard expressed that the economy faces an incredible amount of different variables every day, and, whether positive or negative, they will occur and are therefore accepted as certainties. Businesses, much like the economy in Rich’s explanation, face a similar environment of new and fluctuating variables with customers voicing their concerns on social media channels, regulations constantly changing and employees communicating on powerful mobile devices.
Businesses should accept that these new events are here to stay, and the ability to sense and respond to them as they occur will be crucial in their crusade to succeed. The world, whether in business, economics or other arenas, is getting smaller and faster, and in the coming years, becoming increasingly operationally responsive will be what separates success and failure.