WHERE’S ALL THE GROWTH GOING TO COME FROM?
Martin Sorrell has apparently admitted last week that growth prospects in the West are weak for the foreseeable future.
Governments all over the place are finding creative and not so creative ways of reducing spending and extracting more money into their coffers. Companies are cutting back wherever they can. Borrowing money for consumers is becoming harder and harder, with mortgages being particularly difficult to obtain.
Meanwhile Apple goes from strength to strength and many companies, like GroupOn, the shopping voucher company, continue to expand into different countries, seemingly untouched by the purveyors of doom and gloom. Indeed Start itself has expanded its geographical footprint in recent months with some really impressive results.
If economists are to be believed, then the key to success is to keep on innovating and expanding when everyone else is retrenching – a sure fire way of gaining a competitive advantage.
Yet why is this so hard for companies to take on board?
The depth of evidence in history is extraordinarily in support of the case for investment behind innovation. It’s a bit like someone being shown all the evidence that 2+2=4, yet deciding that in fact they are going to go down the strategy equivalent of 2+2=3. You could understand it if there simply was no access to money, but for most large corporations, this isn’t an issue. It is, instead, a mindset; an aversion to any form of perceived risk, that drives this illogical behaviour.
The ultimate irony is that the bigger risk will be faced by those companies who ignore growth opportunities at this time.