Coming back to the original point, I think it's important to remember that, unlike 8 years ago, the cause of the economic slow-down is significantly different. In 2000 we saw a large % of the sharemarket value wiped out as a result of the loss in confidence of the technology sector. Up until that point the value of many technology stocks were riding a wave of media hype fueled by a generally strong economy (9 years of consistent growth in the US and global markets) and higher disposable incomes (reinforced by low inflation and rising wages).
As investment funds were pulled out of the sharemarket in 2000, a lot of companies that had previously been very liquid - using their rising sharemarket valuations to access cheap investment funds - were suddenly devoid of their cash. The result was a general loss of momentum and investment within our industry, and it flowed on to other industries via the investment funds that lost so much as the markets fell. Unfortunately, there wasn't all that much going on globally to help balance out the sharp decline in growth and the lack of available investment funds. More importantly, all the hype about the Web and the Internet leading up to 2000 was invalidated in the minds of many when the share prices fell. So when funds for marketing & advertising started to dry up, organizations moved their investments back to traditional media channels. We are currently looking at a different set of conditions although many of the macro-level effects are similar: low GDP growth; increasing cost of investment funds; decreasing availability of investment. The current economic problems are largely the result of structural issues introduced with the deregulation of financial markets, and the commoditisation of credit over the past few years. The success of the sub-prime mortgage markets was predicated on the continued strength of the housing market in the US, as well as the US & global economies; the deterioration of that strength resulted in the issues we see today, out of proportion to the level of bad debt being experienced. Over the next few quarters we will see a similar tightening of corporate investment in advertising & marketing spend that we witnessed in 2000. This is a natural response to 'tough times' although not necessarily the wisest. However, it will happen... We are also seeing a global economic condition that is markedly different from the prevailing macro-economic conditions of 2000. China and India's economies are going strongly, and fueling a global surge in resource prices and companies as they feed their hungry burgeoning industries. Cost conditions (i.e. cost of production) is still relatively low in these countries, so they will be less affected by reduced manufacturing capacity globally. Similarly, markets & economies in Europe have been reasonably well protected from the sub-prime mortgage effects. All economies globally are seeing higher interest rates and a higher cost of credit which is impacting the funds available for companies to make capital investment. But unlike the patterns we saw in 2000, organizations will be looking to invest in smarter advertising & marketing channels and these days that definitely means online channels; viral campaigns; and social media. And to take maximum advantage of these environments requires the application of the expertise you find represented here in this forum. So, what do you - as a practitioner - do to protect yourself during times such as these? Work on your ability to demonstrate measurable value; greater effectiveness; higher levels of customer engagement. Pay attention to the impact of the economy on your client - work with these constraints; give them options. One final note by way of caveat: in 2000 a significant portion of both the market bubble and the market crash were the result of a mob mentality rather than any objective analysis of the value of the companies. The psychology of financial markets is more important these days than the finance: and that means change can occur very rapidly, and with disregard for the economic fundamentals. Steve ---------------------------------------------- Steve 'Doc' Baty B.Sc (Maths), M.EC, MBA Principal Consultant Meld Consulting M: +61 417 061 292 E: [EMAIL PROTECTED] UX Statistics: http://uxstats.blogspot.com Member, UPA - www.upassoc.org Member, IxDA - www.ixda.org Contributor - UXMatters - www.uxmatters.com ________________________________________________________________ Welcome to the Interaction Design Association (IxDA)! To post to this list ....... [EMAIL PROTECTED] Unsubscribe ................ http://www.ixda.org/unsubscribe List Guidelines ............ http://www.ixda.org/guidelines List Help .................. http://www.ixda.org/help
