Succeeding in low-growth markets
By The Futures Company
It is now more than four years since the financial crisis struck, and the mood has changed. At the time, the conventional wisdom was that, while the crisis was serious, we would see a similar pattern to previous recessions: a two- to three-year period in which output was below its pre-crisis peak, followed by a return to growth. It hasn’t happened. The scale of the financial sector’s losses, the level of debt in richer economies and the austerity policies pursued by many governments have combined to create a slowdown that is longer and deeper than anticipated.
In their latest assessments, both OECD and IMF are downbeat. Growth has slowed significantly since the boom years of 2003-2007, and the IMF’s World Economic Outlook says there a significant risk that “global activity could deteriorate very sharply.”1 The OECD’s latest update talks of “a hesitant and uneven recovery” and warns of the threat of renewed recession.
Now some economists are suggesting that the growth years before the crisis were a blip rather than a trend, and that the rich economies will have to learn how to live in a world of low growth. They may be wrong; pessimism is also a feature of recessions. But what if they are not? It would mean a fundamental shift in the way that companies do business in the richer world. In this Future Perspective, we examine the arguments and outline the ways in which businesses need to change their thinking if they are to succeed in a low-growth world.
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