Page 73 - Accelerating out of the Great Recession

ACCELERATING OUT OF THE GREAT RECESSION

ceutical and direct-care business. As for energy, the sustainabil-
ity agenda provides governments around the world with all the
excuses they need for intervening in a more proactive way.
All this matters because regulation, while critical to providing
appropriate safeguards, is too often a restraint to effective com-
merce—and therefore growth. And if this seems an overly pes-
simistic scenario, it is one shared by many business leaders: 81
percent of the executives in our survey share our view.

■ THE EMERGENCE OF ■
THE NEW CONSUMER

Consumers drove the boom—in some countries with a
momentum that was turbocharged by excessive debt. And it
will be consumers who—through voluntary and involuntary
changes to their habits and behavior—will determine many of
the new realities of business life in the aftermath of the Great
Recession.
In the past, consumers could be counted on to spend an
economy out of a recession. But no longer. A whole generation
will start to spend less for two reasons: one, because its mem-
bers either can’t or don’t want to borrow more; and two, because
the times of easy wealth creation in stock markets and real
estate are essentially over.
Already, savings rates have been creeping up across Europe
and in the United States as consumers have started paying back
debt and have kept their hands in their pockets, precipitating a
big fall in retail sales. When the U.S. savings rate leapt to 5.2
percent in the fall of 2009, it was the highest level in more than
10 years.

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