The New Economy
The New Economy
The New Economy
The New Economy
Recently, many conversations regarding the current state of our
economy have included the term "New Economy". Unfortunately, trying
to pin down the definition of this new term is a bit frustration since
depending on whom you talk, the definition changes. Bankers,
retailers, manufacturers and consumers all have their own opinion as
to what this term really means. You can Google "New Economy" and a
host of articles appear that discuss the topic at length. The
definition of the term, however, shouldn't be that much of a surprise,
once defined properly.
The New Economy is the change or evolution we are witnessing, within
industrialized nations, towards a service-based global economy. As
simple as this sounds, the changes that are taking place within these
industrialized nations has enormous implications for how any economy
approaches international business and economic growth. We, globally,
are quickly starting to see these affects, of an economic
transformation, that was predicted back in the 50's. It was then that
many renowned economists predicted that manufacturing would slowly
decline and we'd see a shift towards a more service-oriented economy.
Why then were the recommendations ignored? The primary reason perhaps
was tied to the fact that no impending doom or significant event
required us to pay any attention. Most of us were making money, wages
were up, employment was down and corporate America was recording
record profits. We all seemed comfortable with the current state and
couldn't see reason for change. Little, if anything, motivated us to
look further into the future and anyone who warned of some future,
sketchy-at-best collapse, didn't seem to be too believable. We then
experienced a couple of gentle dips (relatively speaking) in the
economy over a couple of decades, but again, no one saw a need for
change. Nothing drastically happened that caused any of us to hit the
economical red alert alarm button.
However, today we seem to be experiencing the results of our neglect.
The refusal to plan for a New Economy has resulted in the lowest
levels economic growth in almost 50 years. Manufacturing has
continually declined since 1960 while the service industry has
continually increased during that same period, surpassing that of
manufacturing as far back as 1982.
This New Economy focuses on service as a product driven by a global
economy. And the key here is a focus on a service economy which is
global smart. We can no longer count on just the United States as a
sole source of demand for products and services. We need to think
globally. China, India and Brazil are beginning to show significant
growth. The economic indicators for many of these foreign markets
suggest that there is an incredible opportunity to target an untapped
consumer demand that isn't able to be fully addressed by their
respective countries. Maneuvering through the challenges of
globalization can be a daunting task in itself; however there are many
experts out there that can help. With this help, emerging markets,
such as India and Brazil, as well as many others, become opportunities
to the likes we have never witnessed before. Waiting longer, and
ignoring the trend from industrialization to a service-based business
model, would be disastrous for our future.
How do we turn this around? The first expectation is to realize that
change does not happen overnight. The key is to attract or develop
new industry. We must attract industries that focus on information,
knowledge, technology, and flexible manufacturing, as a service. The
next step is to attract entrepreneurs. Studies have shown that where
there is a density of creative and entrepreneurial talent there is
also significant growth in any industries.
How do we attract new industry? We first recognize the trends and
then set out to build infrastructure to support this growth. It's
time to invest in the communities that attract entrepreneurs and
global companies. Next, market our communities. We should clearly
understand our local resources and then market each of these distinct
advantages in order to enhance these growth initiatives.
I recently had someone tell me that they never wanted to hear again
that their community was the "best kept secret" in Michigan.
Designing a marketing initiative that speaks to the world about your
community proactively solves this issue. Included in this marketing
initiative should also include the promotion of our quality of life.
In a recent survey of entrepreneurs and business leaders it was rather
clear that business managers and leaders want to live minutes away
from lakes, streams, trails, and the general outdoors. In your
marketing initiative, let people know how your community addresses
their needs and tell them clearly what you have to offer. Finally,
begin today by educating and training your local workforce for the
jobs of tomorrow. Collaborate with your local k-12, Community College,
ISD or university to develop educational programs that provide
introductions, certifications, and degrees focused on the "New
Economy". Any company looking to relocate to your community will want
to see these skills of your workforce.
We must all pull together in our communities to ensure that this
transformation to a New Economy takes place efficiently and
effectively. And with this transformation there will be change. New
businesses will develop, new faces will appear in your community, and
new cultures will be introduced. Additionally, we should be aware to
avoid common erroneous assumptions like, "It will take money to fix
this problem". Not all problems require funding to fix. Collaboration
with local, state and federal agencies will prove that there are
significant resources devoted to help resolve these issues as we move
forward. Take the time now to contact your local representatives and
discover for yourself what's available.
Finally, take action. America ignored the signs and economic
indicators years ago. If we had responded, we could've avoided the
potential predicament we're facing. We're quickly starting to see the
affects of an economic transformation that was predicted way back in
the 50's. Let's not miss this opportunity by stalling, watching and
waiting. Let's educate ourselves and make the necessary changes to
the fundamental way in which we do business. Let's show the world how
to be global service leaders.
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