Page 91 - Accelerating out of the Great Recession

ACCELERATING OUT OF THE GREAT RECESSION

in the Western economies will be around 1 percent annually in
the years to come compared with an Organisation for
Economic Co-operation and Development average of 2.5 per-
cent over the last couple of years.
This era of low growth will create a series of new realities for
business leaders, and these, in turn, will pose an additional bur-
den on future growth.
Of course, innovations will offer companies—and the global
economy—a way to a prosperous future. But they will take time
to emerge, and it might take some years until the world regains
its momentum, despite the stabilizing impact of the emerging
economies.
Having said all this, it should not be assumed that things will
be “all bad all the time” for everyone and that every company
will suffer. Indeed, there will be many opportunities for compa-
nies to gain market share. But more than ever, winning and los-
ing will depend on defining and executing the right strategies.
As we explain in the next chapters, differentiation will be the
key for companies to build the best chance of prospering in the
aftermath of the Great Recession.

IRVING FISHER’S DEBT-DEFLATION THEORY
Just a few days before the Wall Street crash of 1929, Irving
Fisher, the great Yale economist, had confidently talked of a
“permanently high plateau” of stock prices. He thought they
would never fall. And after the crash, he believed that a recov-
ery was just around the corner—putting his money where his
mouth was and losing much of his personal fortune (prompt-
ing John Kenneth Galbraith to observe that losing $10 million

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