WHERE WE ARE NOW: the State of Business [Q4 - 2009]
By Mark Monchek − October 21, 2009
We really want to believe we are on the road back. The stock market just cracked 10,000, holiday travel has come roaring back, job losses have slowed. C’mon we’re Americans and even a whoop ass recession like this one can’t keep us down for long. And, haven’t we suffered enough already? If you are thinking what millions of Americans are thinking, you’ll miss the real opportunity of this game changing economic shift.
Let’s begin where all comebacks must begin…
FACE THE BRUTAL FACTS
If you think the economy is on the rebound, consider this: there are six job seekers for every job. Despite what you may have heard, we’re still in the depths of the current recession. There are 14.5 million people officially looking for 2.4 million full-time permanent jobs. That does not include the millions of people who are not listed in the government statistics because they have given up actively looking or they are underemployed (have a part-time or temporary job but still want full-time employment). Or growing competition from the World War II generation and Baby Boomers who were set to retire but won’t because they can’t afford to.
Businesses are extremely reluctant to add jobs or overhead because the economic outlook is still so uncertain. They have also learned to be more efficient and make do with fewer employees and fewer hours. Even large companies that are back on an aggressive growth path are slow to hire. Two recent surveys found both job postings and employers’ interest in hiring to be at their lowest levels in two years. Job prospects are the worst in manufacturing (down 47%), construction (down 37%), and retail (down 22%). By the end of the First Quarter 2009, 14 million American households (27% of all mortgage holders) owed more on their homes than they were worth. Investment in America’s homes was 56% below its peak. American spending is about $760 billion dollars short for the economy to reach full employment. Even in the sectors considered to have the best prospects, such as education and health care, job openings have dropped 21%. Despite billions in stimulus money, even government job openings have diminished 17%. However, almost 50% of that money has not been spent yet. So there is some light at the end of the tunnel if you know….
WHERE THE GROWTH IS NOW
Even though there is no recession-proof industry, government is where much of the money is now. Working in the public sector certainly increases your odds of finding steady employment with a pension. Government jobs still show a great deal of promise; after all, Uncle Sam is the nation’s largest employer, providing 1.9 million jobs. Of the 3.5 million jobs created or retained by President Obama’s stimulus package, 90% will be in the public sector. Within the field of government work, a wide variety of careers are expected to grow, ranging from clean energy to health care.
In terms of Government jobs, it comes as no surprise that Washington DC and its neighboring states have the highest concentration (30%). The Midwest has 16.1%, the South has 15.5%, and the West Coast has 12.4%. According to Recovery.org, the three states with the highest percentage of their funding available currently are California, New York and Texas. An impressive interactive map is available at this link.
The other growth sectors of the economy are green and clean technology which includes jobs from energy efficiency experts to waste water treatment plant staff. This sector grew 9.1% between 1998 and 2007. While that represents only 777,000 jobs, just .5% of the economy now that sector is poised for explosive growth as government money kicks in and business start investing in their growth again. Fully 80% of all venture capital dollars were in green or clean technology in 2008. Which areas will have the best prospects for growth in the green economy? Austin, Texas, San Jose, CA, Berkley, CA, Pasadena CA and Boston, MA will lead the way. That’s where the money and the skills are. These are all major university centers along with being near where the money is. Arnold, take note, maybe California may make it out the ditch after all.
And what about business growth in general? Where will the economy growing and creating jobs? Madison, WI, Washington DC, Baltimore, MD, Boston, MA, and with a big comeback, Pittsburgh, PA. What do these areas have in common- they are all centers of major universities, government and health care. Will you be prepared to respond to where the economy is headed? Are you willing to move or do business in new places? Will you or your business add the value needed to realize these opportunities? Being aware and responsive are hallmarks of success in the new world of business. It’s a whole new ballgame and the road back will be very, very different than anything we have known in the past.
A VERY DIFFERENT ROAD BACK
It is not enough to say that this recession is a mother, it is much more than just a longer ,slower road back. The road back will lead to very different places than ever before. According to Mohammed El-Barain, the CEO of Pimco, the world’s largest bond manager, growth will be subdued and unemployment will remain high for a quite a while. “The banking system will be a shadow of its former self.” And the securitization markets maybe a shadow of a shadow. Keep in mind that in the recession which began in 1979 it took 9 years to get back to the employment levels before that recession began. The Economist, in its October 3rd Special Report argues that we are heading for a “new normal” that will be quite different from what we have been used to. “Demand in rich countries will remain weak and emerging economies will not be able to compensate….Public debt will rise so that private debt can fall. The banks….will remain cautious about lending again, which will slow the recovery but also make companies more careful about their investment….By the time this crisis is over as many as 25 million people may have lost their jobs in the 30 rich countries that belong to the Organisation for Economic Cooperation and Development (OCED). The danger is that several million many never regain them. The mobilsation of capital will be fitful as the financial system copes with past mistakes and impending regulation. “
But here is what you need to know: most of what you hear about the economy is dead wrong, or just irrelevant. Are we still in a recession? Has the recovery begun? How do I find a good job now? Is it the right time to start a business? What’s going to happen with health care reform? How will that affect me? These are the wrong questions to ask. The right questions to ask are: what really happened? What has fundamentally changed? How can I respond to the new reality?
WHAT WE NEED TO LEARN FROM THIS CRISIS TO SUCCEED IN THE NEW ERA OF BUSINESS
The central lesson of the economic meltdown is that we can’t rely on government or big business any more. Not for jobs, or pensions or anything resembling what we used to call a safety net. If you choose to learn this lesson it requires a radical shift in how you think about yourself and your business. It means that each one of us is fully responsible for our lives, our business, our career, health, relationships, all of it. Can’t blame anything on anyone else anymore. No waiting for the economy to turn around. And not using the idea that we are not smart enough, educated enough, connected enough to succeed in what is truly a more difficult world out there.
WHAT WE HAVE TO FEAR IS….FEAR ITSELF
Remember the wise words of Franklin Delano Roosevelt spoken during one of his fireside chats in the dark days of the Great Depression-“We have nothing to fear but fear itself.” Fear about our future, frustration with the government, and confusion about what to do, have become an epidemic. We have not prepared well for the future. The average adult watches four hours a day of television and is 23 pounds overweight (20 more than in 1980). And we have been spending up the yazoo. Experts say we will need about $50,000 a year in order to maintain a middle class standard of living, which means that they will need approximately $2 million to sustain their retirement. But every moment of extreme adversity is an opportunity for extreme growth.
If we follow a shift of mind with a shift of action we can take the steps towards that growth. Waiting can be replaced with research, networking, asking for help. Ritualistic behavior like overeating, oversleeping, overworking, mindless TV watching or Web surfing can be replaced with activities that nourish the mind ,body and spirit, that help you be more alive, more inspired, more competent. How much money you have is no longer the right scorecard but how wisely you invest and spend the money you have and even more important is what you do with your time. Time, relationships and attitude are the new currency for success. They become the great equalizers in the new world of business. You can invest the time you have to develop an attitude that discovers and nurtures opportunity. You can see that your network of relationships can become a powerful community.
WE ARE NOT IN THIS ALONE
But you won’t have to do it alone. In fact, this is the second lesson of the new era of business-we are all in this together, and we will survive and thrive together. Amazing opportunities arise when we reach out to the communities in our lives: our family, our friends, and the places where we live. The Internet and social media make it easier than ever to build communities and connect to them.
THE END OF JOBS, REALLY, I’M NOT KIDDING
The idea of having a “job” working for someone else should die a quick death. You’ll be much better off if you really understand this one main idea: whether you work for the government or a large financially-stable corporation, you are actually self employed. These days, a “job” means nothing more than getting paid for your past two weeks’ work. Seeing it as anything more is a notion from a bygone era. There is no job security. None, period. If you tell me you work for the government in a department that has never had any layoffs, I’ll tell you to thank your lucky stars. But if you get sick with an illness that’s not covered, or the uncovered portion of your bills get too high, or you can’t return to work, I’ll tell you that you’re better off thinking of yourself as self-employed rather than working for the federal government. Taking responsibility for your finances, your health and your employment is the most important lesson of the economic meltdown.
CREATE YOUR OWN PERSONAL ECONOMY
Despite what you’ve heard, today is the golden age of opportunity. There are more opportunities today than ever, particularly for those who have felt shut out of what they want for their lives. You just have to know where to look and how to look. The Opportunity Show teaches that opportunity is an attitude and a skill. We teach your audience to create their own personal economy, their own stimulus plan and their own health care reform. To get our free article Transforming Fear into Opportunity in the New World of Business click here.
