Page 14 - Accelerating out of the Great Recession

INTRODUCTION

ment. We are interested in the fallout of what is being called the
Great Recession because the nature of the recovery forms the
backdrop against which management must make the strategic
and operating decisions that shape their companies.
And an awful lot hangs on whether a business leader foresees
a fast- or a slow-growing world. Even if business leaders do not
subscribe to the view that economic growth will be slow, we still
believe that they cannot go wrong by following the line of logic
set out by the philosopher Blaise Pascal in his work Pensées. He
was not sure whether God existed, but—in what has become
known as “Pascal’s wager”—he argued that it is most prudent to
act as if there is, in fact, a deity. The consequences of living a life
of a nonbeliever—only to discover, at the moment of death, that
such a path was wrong—are too dire to risk. When it comes to
business management, the analogous quandary is the question of
economic growth.
To set a context for our thoughts on strategy and management,
we need to come clean on our assumptions about growth—which
are firmly rooted in our view on the nature of the recovery in the
United States. U.S. consumers drove the global boom, and they
will determine—through their changing habits and behaviors—
many of the “new realities” that we believe will shape the global
economy (more on this in Chapter 2).
It is not only the fact that U.S. consumers generate a very
large share of global GDP—on the order of 18.8 percent—that
makes their contribution so important; it is also that there is no
obvious short-term replacement for this mainstay of the global
economy. There may be four times as many consumers in China
as there are in the United States (and Chinese households also
tend to have stronger balance sheets), but Chinese consumers
simply do not have the wealth or spending power of the U.S.

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