BIZTIPS - March 9, 2008
BIZ TIPS: Prepare for Recession with Innovation
Sunday, March 9, 2008
Getting out of town for a couple of weeks can put your local business in perspective. Getting out of the country for a couple of weeks can put the whole world in perspective. While USA Today was yelling about the Democrat primaries in 8” headlines, London’s Financial Times put the story below the fold in a single-column, 3” clip that resembled a want-ad.
The FT also kept news of the U.S. economic recession in check. It didn’t even make the front page on March 3. On March 4 it was reported as quotations from Warren Buffett’s annual shareholder address. With his usual candor, Buffett said that the U.S. is in a recession “by any commonsense definition” of the word. He went on to say that while economists can argue whether or not we’re technically in recession, most people are experiencing recession…”Certainly their net worth has been heading south.”
So with mortgage foreclosures at an all-time high, trillions draining away in two concurrent wars, and the fact that a recession is upon us, what can we do to keep business moving at home?
In a word, innovation. While that seems kind of upbeat for recessionary thinking, give it a chance. First, according to a recently published global analysis, the U.S. continues to lead the world in innovation. So in good times and bad, it’s what gets us through.
Second, if you’ve been in business longer than ten minutes, you already know that despite national economic trends, there are sectors that are still strong. Food production, fossil and bio fuels, and luxury goods are three right off the top. Record commodity prices are being driven by world food demand and climate change. China is forecasting six million new cars per year. Mega-yacht orders are three years out and growing. Moscow now has more millionaires per capita than any other city on earth.
If that doesn’t seem relevant to your business, consider this. The owners of a small Tualatin pollution control company returned Tuesday night from meetings with their new European agents in Austria. Their products are being installed worldwide. A condo developer is buying and renting his own units during the sales downturn. One eastern Oregon business avoids the cyclical highway truck market to focus on “working trucks” for heavy local and farm use. Christensen Yachts in Vancouver Washington is launching a new 157’ yacht every four months. Each yacht needs an army of craftsmen and container-loads of fittings.
In the slowing economy of 2001, Rudolph Burger (research firm CEO, former Xerox VP) said “Plant a thousand new ideas.” Maybe in your business that means increasing your web-based sales, contacting agents outside the U.S., or re-positioning your products for recession-proof customers. However you approach it, recession should be a time of careful innovation in your business. Burger also said “You don’t want to emerge from a recession without a new product to sell.” Sound advice.