Economic Recoveries.

Executive Summary: What would explain the length of the jobless recovery phase in an economic recovery? Would we find answers by comparing trends across recessions, or by comparing trends across countries, or by both? From the desk of I-Think-Therefore-Economics-Exists.

 

The employment/ population ratio has hit a low point not seen in a long while:  http://research.stlouisfed.org/publications/net/page10.pdf

While you can utilize publicly available statistics to make your own charts and form your own views, here is a way to structure thoughts around it:

1. How do you compare recoveries and the nature of unemployment across recessions in the same country?
2. How do you compare recoveries and the nature of unemployment across countries during the same recession period? 

Comparing Economic Recoveries Across Countries During the Same Recession Period.

Since there have been comparisons between the European economies and the American economy:

1. How do the trends in the employment/ population ratio compare across countries?
2. Are European economies more likely to have structural changes in unemployment rates than the US?

Comparing Economic Recoveries Across Recessions in the Same Country.

What does the increasing "length" of the jobless recovery phase in a recovery mean, as a trend across recessions?

Is there something in the nature of the economy, the nature of the macroeconomic entities in the economy, the depth of the recession, or the boom period prior the recession that has primacy in terms of its impact on the nature of the recovery?

Here is one pattern of Socratic thought that explores the two questions above.

Is the increasing length of jobless recovery phase in a recovery, as a trend across recessions, a function of:

1. The increasingly service oriented nature of the economy?
2. An increasing dependence on large monolithic corporate entities over time as drivers of economic performance, with the dependence changing from direct hiring to a greater multiplier effect across the economic ecosystem in terms of dampening hiring?
3. The nature of work available to labor, which has changed from hyper-local activity, to increasingly being touched by global supply chains?
4. An increasing delinking of corporate performance, financial institution performance and "real" economy performance?
5. The degree of specialization, and education, require for work, requiring a greater time for individuals to unlearn, turn around and relearn?
• E.g. I talked about Baked by Melissa here, and surprise, surprise, it has expanded to four stores in NYC.
6. A greater population density in large metropolitan areas over time?
• This may be counter intuitive, if you think in terms of supply, where people band together to create economic activity (not everybody can be an entrepreneur).
• However, if you think in terms of depressed demand, which translates into opportunity for economic activity of a certain type, this may be a worthwhile line of inquiry.
7. Our lifestyles, which are less community driven, and hence make turnaround during recessions more difficult?
• E.g. This may be an effect seen in decreasing labor activism (ed- analysis to be done) with each passing recession.
8. A psychological effect (animal spirits) of the nature of the boom period that preceded it?
• E.g. How long did the Dutch economy take to recover from the tulip boom?
9. Simply the depth of the recession?

What do you think?

Note: Throw someone a thought provoking point about economics, and ye shall reap many more thoughts in return. These thoughts were first published in a macroeconomics forum, in the week of July 16th, 2011. Thank you, Prof. Rosensweig.

Ad Spend Trends in the US

Executive Summary: A quick check with *you* on your thoughts on media and ad spending in the US. The objective is two fold- identify what you believe are the factors driving the trends, and then seek your forecast for this trend.

Trend: Advertising Dollars

I attended a conference where a respected businessperson emphasized a trend in the media industry. Ad spend in online channels was not growing the overall pie in terms of dollars. Instead the online channels were cannibalizing other channels. So the question arises- is there a disssonance between the change in the size of the pie, its slices, and consumer/ end user relevance?

Older, publicly available statistics are available here:
1. Fred Wilson:
http://www.avc.com/a_vc/2010/06/ad-spend-trends.html
2. Hal Varian:
http://www.theatlantic.com/business/archive/2010/05/a-google-eye-view-of-the-newspaper-business/56360/1/

Some Macroeconomic Factors

1. Are economic conditions factors in terms of the overall ad spend pie? How?
2. Are demographic trends factors in the stagnation of the overall ad spend pie? If so, how do these trends play out in terms of the slices of the pie?

Marketing Teams as Factors in Ad Spend Shifts

I also noted some opinions a few years ago that the move of marketing dollars from traditional media to online media would be slow because of deep, embedded marketing and agency relationships, as well as marketer mind share.

Consumer/ End User Behavior

1. Has the user's behavior across the various marketing communication touch points, even with the addition of online media touch points, changed?
2. Has the user's reaction to these marketing communication touch points changed over time?

What do you think?

Conference Panel: Selling to the Indian Consumer

Amazing insights from consumer electronics and retail consulting. A consumer electronics company was focusing on the top 30 cities, despite indicates that the rural market had as much disposable income as the urban market. This raised a couple of questions from me during the panel.

What kind of innovations in distribution do we see in India in the next 5 years?

What do you think?

Can the Consumer Electronics companies contribute to more active usage of the cellphone screen? This query had an interesting response and an unexpected fact component- India uses only about a third of the spectrum that the US currently uses.

Does the Indian cellphone consumer need an industry association comprising of consumer electronics companies, software companies, infrastructure companies and investors to encourage more active usage of the cellphone screen?

What do you think?

The Usual Disclaimer: This is purely a knowledge sharing resource. Ethically, context is everything, and I will gladly retract anything that affects the parties mentioned. Call this my mini OpenCourseWare, if you will, where Open signifies life experiences.