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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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