There is a radio commercial out there right now. I can’t name their product because it isn’t effective enough to build name recognition, however in it, a team of business people are sitting in a Chinese restaurant. They have to make a decision about what to present to their CEO, and they make their determination by what their fortune cookie says. The theme of the commercial is, “if it were that easy”.
I’ve been asked a lot recently whether I believe we are coming out of the recession. My gut feeling is that we are coming out of it, but my information is based upon what I see, rather than any formal scientific or scholarly analysis. In my career, because I work with so many companies, I see what is happening in a bunch of sectors. A year ago, the place to be was in the public sector as they had stimulus money and the wherewithal to invest in infrastructure. These days, it seems like many industries are back to investing in their future development, albeit the projects we do now are less grand than they might’ve been in 2007-08. For me, the assessment of whether we are coming out of the recession has to do with the level of confidence I am seeing. Are my neighbours doing home renovations? Do I read on Facebook that my friends are going to parties, restaurants and events? Are my venture capital friends and my friends in investment banking showing up to events and wanting to meet new people? Do I feel as worried or anxious as I may have a year ago? Because I see movement, I believe there is hope.
Ben Stein, the famous economist and noted actor from Ferris Buehler’s Day Off, often attributes positive economic growth with velocity of money. Therefore, looking for evidence that there is spending (which breeds spending, and so on and so on) seems reasonable. Certainly it has to be better than reading a fortune cookie.
This week I attended the Mississauga Works Mayor’s Summit. Warren Jestin, Chief Economist at Scotiabank, was one of the speakers. To paraphrase him, he said that he believed that we were on the road to recovery, but that in all likelihood, the path would not lead to where we were before. I think he is right. In the depression, it took years for consumer confidence to bounce back, and economic growth was a product of war spending. We are facing one of those major restructuring challenges again, and without consumer confidence there is not enough velocity. I do believe success is also contingent upon the conversion of some aspects of our economy, our manufacturing base in particular, and hopefully we can do this without having to rely upon a war to get spending going again, but this will take work.
There is a lot of evidence that unemployment among those in the HR field is high. I judge this by the number of people who have joined this circulation in the last year, relative to the number of jobs that we are circulating. The length of time people are out there is also a lot longer than before. I wish I could improve this, but there’s no magic fortune cookie expressing the direction we all need to take. At a macro level, I believe change will start with taking that leap of faith that spurs job growth.