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Optimistic Indicators from the Business(Week) Community

Posted by: Greg T. Spielberg on August 14

We’re almost two years deep into the recession. The worst economic downturn since the 1930s. More than 14 million unemployed. Trillions in market equity evaporated. Insecurity about our position in the global economy. Doubts about innovation. IT security. Education. Insurance. Manufacturing. Energy. Wall Street. Government. Whew.

With all the elements that go into growing an economy or a business, there’s a lot of information to digest. As we are seeing from the health care town halls, what we take from that information doesn’t always align smoothly with the opinion of our friends, family or colleagues. Friction causes heat and that’s OK. Americans have expressed an ample dose of skepticism since George Washington signed on for a second term and spurred some citizens to shout: “Monarch!”

As it was with Washington in ’93, the future of America’s economy is up for debate in ’09. BusinessWeek’s community is as good a place as any to delve into the disparate thoughts on where our economy is headed. There are the pessimists — Sue writes, “So much for democracy. Bye bye middle class.” There are the skeptics — Dougalmac predicts “the fiscal future of the country looks questionable at best.” There are the conspiracy theorists — More Koolaid From The U.S. Labor Department (what a perfect blend of form/function) writes, “This is going to be just like 1984! The worse it gets, the more the government and the media will make you believe things have improved.”

That’s a bold claim, especially in light of a nascent housing rebound, slowing job losses, increased consumption and renewed, if spotty, employer confidence. But, for Koolaid and others tired of hearing only from the media, HERE’S A SLIDE SHOW with 13 entrepreneurs and business owners from across the country that might make you think things are improving. To contribute your own thoughts — positive, negative, lagging, leading — comment below. You can also check out what business leaders have to say.

What Signs Tell You The May Be a Recovery?
The BusinessWeek/YouGov Optimism Index kicked up dust last week, heading north to an all-time high of 44%. Americans might not be giddy about the economy – the index is out of 100 – but they are looking up. Three percent more YouGov respondents say the economy is getting better and market speculators seem to agree. The Chicago Board Options Exchange Volatility Index, or VIX, is at less than 30, suggesting an even-keeled market for July.

As helpful as indexes and surveys can be, the most telling view of our economy is built via anecdotes from the ground. For our August double issue, BusinessWeek is putting together a slide show comprised of indicators from everyday life. Then, we’ll select the six most prescient observations to feature in the magazine. Some readers have already tipped off the community to streaks of light in the recession; we’re looking for more. Tell us if the commuter parking lot is filling up again, or if your downtown has a bit more bustle. Where do you see growth, increased traffic, future profits and competitive advantages? What is the media missing that you feel is a tell-tale sign for optimism?

Reader Comments

Daniel Faintuch

June 29, 2009 03:47 PM

In every recession, consumers tend to be overly cautious with their discretionary income due to fears of unemployment. This only aggravates the economic situation as the decrease in spending further erodes the job marketplace.

On the other hand, when consumers are confident enough to spend their discretionary income in a generous way, it is a sign that they have regained the confidence in the economy. Their applied optimism will subsequently create jobs and help revive the economy.

The sale of 1 million iPhone 3GS within 3 days of its launch was clearly one of these signs. It was a remarkable example of a large number of consumers spending a significant amount of money on a non-essential item, a definitely positive indicator for our economy.

Daniel Faintuch

June 29, 2009 04:06 PM

Regarding the question of: Where do you see growth, increased traffic, future profits and competitive advantages?

Every recession contributes to the demise of more than a few businesses, usually the most inefficient ones. Despite their shortcomings, these businesses have detained a certain share of their markets.

If there are no new entrants into these markets, the market leaders will absorb the market share of the failed players. However, the recession presents an opportunity for entrepreneurs to enter the market and attempt to obtain that share.

Now is, therefore, a great opportunity for companies to create remarkable products and services and leverage their expertise and/or scale in order to enter new markets. The window of opportunity will close as soon as these consumers are taken in by the large players. Since it'll be much harder to obtain them later, now is the time to act.


June 29, 2009 04:10 PM

From a professional standpoint, online, trackable advertising for small to medium-sized business is on the incline, not decline. I've been selling print for 5 years, and moved to online (IAC/Citysearch) 5 months ago and have never been more successful in a sales role. Yes, restaurants, clothing boutiques and smaller businesses in general are pulling large amounts of their marketing budgets. But, they also seem to be focusing on recirculating it online and in areas they can actually see a return.

Citysearch as a whole surpassed its Q1 goal, and that was with going through the G3 migration, which was basically a full re-site development. While print, radio, and other forms of advertising are struggling big-time, online, low-cost advertising investments are booming.

Krishnan Subrahmanian

June 29, 2009 06:11 PM

Just ten months ago I got my white coat and stethoscope and for the very first time I had the honor of entering a room and asking people deeply personal questions and hearing their story. The chance to hear these stories is what attracted me to start medical school.

It is a remarkable time to be a medical student because as we are being indoctrinated and immersed in the traditions of the profession we simultaneously hear grumblings of dissatisfied professionals. Every pre-med student or medical student has heard about "paperwork." We hear that the job "isn't what it used to be" or hear veterans say, "If I had to do it again..." We hear patients who have been denied coverage and we see that millions of our neighbors are uninsured.

Yet I am optimistic because right now, from our vantage point as medical students, we hear the call for reform drowning out the complaints. I am optimistic because influential players in the current debate hear Dr. Gawande's call for a system "in which doctors collaborate to increase prevention and the quality of care, while discouraging over-treatment, under-treatment, and sheer profiteering." We hear Catherine Arnst highlighting the medical home model. I am optimistic because this time, unlike in 1993, we see organizations such as the American Academy of Family Physicians, the American College of Physicians and grassroots movements such as Doctors for America working for change.

I am optimistic because doctors and medical students are working to restore, highlight and remind ourselves of the elements of medicine that make it what it is: An honor and a privilege.


June 30, 2009 09:36 AM

This past spring, the clothing store I own here in downtown Des Moines saw its sales rise by 110% over spring 2008. I credit this to two things: 1) localized merchandise that is unique to Des Moines, most of the t-shirts made in the USA and screen-printed inside the store, and 2) a reasonable price point.

While I've watched larger, mall-based retailers decline quickly in the last few months, I see that as part of a more general trend that has been occurring over the last few years: the hip kids are moving away from the mall and from the suburbs, and they are moving toward urban city centers with unique retail. Where retailers like Abercrombie have taken serious hits, smaller stores like mine that are much more localized, urban, and adaptable have benefited greatly from the shift away from the mall, and this shift has almost accelerated through the recession. When there are fewer dollars to spend, it is often the generic, over-priced styles that fall by the wayside.

Many of the larger, public retailers are in a tough spot, but not solely because of the recession. Many small, private businesses are in tune with their customers far more than a larger company, and are not only succeeding through the recession, but are positioning themselves to take up a bigger chunk of America's retail economy in the next three years.

batter cupcakes

June 30, 2009 11:58 AM

Living in a small mountain town that attracts wealth, I believe that we have felt the effects of the recession last. It took awhile to trickle down (or up) to the Rocky Mountains. However, when looking at my year-to-date cupcake sales I have had an increase of 60% so far over last year. Business owners in town keep saying, "all we can hope for is being equal with last year." Seeing that cupcake sales are on the rise, a splurge similar to the new iPhone, I see a turn for the better here.

Christa Avampato

June 30, 2009 09:59 PM

Hi Greg,
I'm hopeful for a whole host of reasons, most of them found around my neighborhood:

1.) JOE, my favorite coffee shop in New York, recently expanded and opened up a new branch just down the street from me. Who is expanding in this economy? That place is always humming. JOE puts out a very personal newsletter written by the owner, conducts a weekly running club, holds classes relating to coffee, and has a really, really tasty brew. That simple combination has loyalists coming back again and again, economic downturn or no economic downturn.

2.) On Sunday, a friend of mine and I tried to go to Alice's Tea Cup for brunch. There was a two and a half hour wait. A tiny cafe that offers an experience, good food, and ignites the imagination has a two and a half hour wait in the midst of a recession. Clearly, they're doing something right.

3.) I recently moved to a new apartment that is twice the size of my old apartment, in my same neighborhood, and decreased my monthly rent by 12%, no broker fee, newly renovated apartment. In the past few years, New York has priced students, artists, and entrepreneurs right out of its borders. This economic reset just might make New York an affordable place to live again, re-energizing the diversity of talent that made it great.

4.) Travel is getting cheaper and cheaper, allowing more people to expand their horizons and gain a wider understanding of other cultures. That's got to be good for our future. Empathy and understanding never goes to waste.

5.) Nonprofits are over-run with volunteers. There is a spirit of activism and a strong desire among many to make an impact in this country; only good things can come of this.

6.) Broadway ticket sales are on-par to last year, despite the recession. Granted a lot of shows closed in January. The ones that remain are seeing full houses on a regular basis. And the money they're discounting per ticket is being made up with higher ticket volumes. Accessibility to the arts makes us better people - it encourages our creativity and helps us see the world through new eyes. Art teaches us how to tell powerful stories - a valuable skill in any industry.

Hope is all around us.


July 2, 2009 10:32 AM

Today's jobs report made be feel very optimistic.

Sam Margolis

July 7, 2009 03:18 PM

From my perspective as a musician in New England/Boston with my band Comanchero.

Entering 2009, I expected Comanchero's CD sales, downloads, and show attendance to take a dip in line with the economy. However, I have been pleasantly surprised over the past few months to see that our show attendance has been as strong as ever in Boston and around New England. People are still coming out in droves to see live music, and what's even better is that our digital sales are up 20% over last year. In spite of the fact that hard CD sales have been flat this year, people are using the Web more than ever to consume music, and we still see willingness from our fans to pay for digital downloads.

Luke Reynolds

July 7, 2009 03:20 PM

I can't tell weather or not it's the past 10 years of work I've put into music, all suddenly coming to fruition, or the fact that maybe certain aspects of entertainment are especially vital to people seeking an emotional escape during this "down period", but I've been actually been getting more work recording on other peoples records in the past 3 months than I've ever gotten thus far in my entire career. LA + Nashville both seem to be hotbeds of creativity right now where records are still being made! It's just that they're just being sold in different ways than they used to and labels need to scramble to generate another business model especially as theirs becomes more and more irrelevant.

Lydia Dishman

July 8, 2009 11:03 AM

Two words: Eighties fashion.

The return to the styles, colors, and quirks of the 1980s signifies much. The Reagan era held a certain level of economic optimism for many, and fashions of the day reflected an attitude of conscious consumerism.

That time period saw the emergence of the power suit with its broad shoulders and sharp tailoring for both men and women. Their millenial counterparts are growing shoulders (especially for the women), and hemlines are rising once again.

Piling on bracelets, chains, and baubles was huge twenty years ago -from the cheap, yet chic, armload of rubber wristlets worn by Madonna, to the weighty collars of chains and pearls a la Chanel. Take a look at major retailers such as J Crew and Banana Republic and you'll see counters full of sparkling cocktail rings that cover fingers up to the first knuckle, generous sets of bangle bracelets, and necklaces that blur the line between ornamented chain and breastplate.

But perhaps the most significant sign of optimism in fashion are the colors of the clothing. Skinny ties in eye-popping brights for the guys harken back to the new wave uniform of alternative musicians. Royal blue, magenta, and goldenrod glow from the racks of womens skirts and tops. Oh, and let's not forget neon. Really, is there any other palette that shouts exuberance more than chartreuse, day-glo orange and vibrant green?

Devon Dudgeon (via Twitter)

July 8, 2009 06:13 PM

Things are picking up in digital marketing, especially SMEs who are realizing they need to invest a bit to get new customers. @ddudgeon

Christopher Savage (via Twitter)

July 8, 2009 06:19 PM

I'm seeing an increasing number of companies investing heavily in video for their sales and marketing. - Christopher Savage, president & CEO, Wistia (@csavage)

George Chevalier (via Twitter)

July 8, 2009 06:23 PM

Just had our best month. Positive for TerraCycle mission: put environmentally responsible choices within everyone's grasp (@gwchev)

J Allen

August 16, 2009 06:18 PM

When the recession started to hit, my business and I realized that there might not be growth in my sales for a while so I turned my attention to preparing my business for a economic boom. I carefully grew my inventory while most companies were reducing theirs. There is nothing like a downturn for finding great deals. Without overloading or overspending I continued to grow my inventory so I am prepared for a bounce or even a moderate growth period.
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BusinessWeek’s Joe Weber, Patricia O'Connell, Michelle Conlin, Frederik Balfour, Peter Coy, Greg Spielberg and Roger Crockett examine The Case for Optimism by looking past the financial turmoil and economic unrest gripping the globe to focus on the promising future that lies on the other side of this storm. We’ll chronicle the forward thinkers investing in R&D, launching promising new products, entering new markets, or implementing management and leadership.

See why BusinessWeek Editor-In-Chief Stephen J. Adler is optimistic about the economy amid the sharpest downturn since the Great Depression.

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