Looming Depression!, page-4

If so, why then are their internal investment funds still pursuing investment opportunities all about the place?

No-one ever said that the road to economic recovery will be easy, or smooth. But, it will be patchy in parts, rather than consistent across the board.

Telecommunications and tech, for instance, are still in a deep recession, which they have been for some time. This has been due to many factors including over commitment to capacity, overpayment of spectrum licensing fees, as well as customer resistance to new pricing models (ie: being sufficiently educated to pay for a valuable service, rather than simply take it for granted).

Conversely, the physical goods' industries such as motor vehicles, have made great inroads into their future recovery plans, through rationalisation of competing platforms (both intra-model derivatives, between models, and across competitor boundaries).

The services' industries have been slow in ramping up their development, but this will still be where many of the jobs of tomorrow will be created. The problem here, however, is again with educating customers to pay a proper service fee for aftercare (post purchase services and support, etc).

In the finance industry, global funds management, and global funding flows will largely determine the extent to which this particular industry continues to grow in the future. More likely, it will be a case of further global and local rationalisation. With this, however, will emerge another form of service offerings in the form of mortgage, finance, transactional, and planning aggregators /transactors /brokers.

The building industry is again something which will come under the microscope in coming months (ie: is it overheating, or not, that is the question?). But, with a growing global population, both in the developed and in the developing world, there will always be a strong healthy, underlyicng demand for building services. Within this context, both basic materials, and finished inputs will continue to develop. But, by far and away, the most significant growth factor in the building industry of tomorrow will be building management and support services (not just in terms of rental management, but also in terms of infrastructure management and support, logistics management, strategic planning, space incubation /space banking, and in utility services management). Coninued outsourcing here is something which will, therefore, continue to gather force.

Elsewhere, education and training services will continsue to gather force.

In Europe, however, the problem has more to do with the following than with anything else:

1)
A changing population paradigm which is moving from a growing population, to an aging population (in most EU countries), or a declining population (in countries such as Italy, Greece, and in northern Europe).

2)
A changing production mix, where heavy industry (such as in Germany, France, the UK, and throughout the central-west) is in need of being phased out in favour of lower cost, overseas production points.

3)
An incomplete services outlook where, far and away, Ireland has developed the best services economy existing in Europe, today.

4)
An overly centric bureacracy which gives the EU power at the centre, but at the expense of a separate national identity. This is particularly so where the EU is being seen more as having to fit in with the German /French approaches, as opposed to providing a consistent, balanced macro outlook.

5)
An unenthusiastic population, particularly throughout the Mediterranean region where the past-time is more a case of avoiding, rather than engaging in, the work ethic. Countries such as Spain, Portugal, and Italy are repeat offenders here.

6)
The existence of a much more immediate problem which concerns the level /extent of illegal immigration /illegal workers who are working throughout most of the European countries (ie: forming part of the hidden employed, as opposed to the more visible unemployed).

7)
An associated problem of remaining protected behind artificial trade barriers (whether in the form of continuing tariffs, bounties, additional regulatory requirements, inconsistent regulatory regimes, or the continuation of a plain old competition law syndrome which dates back to when the EEC was originally a protective function for the European steel industry).

8)
A further problem associated with competing with a multi-tiered American economic environment which simultaneously is operating in the extraction, physical, technology, services, support, and future focused (ie: bio-tech, Silicon Valley, etc) markets.

A depression, therefore, is not something that will (in my estimation occur). A patchy and inconsistent economic recovery though is very much on the cards.

Rather than a fully integrated global economy, running equally on all cylinders, the economy of the future will be as disruptive, and inconsistent as it has ever been in the past. Perhaps, more so. But equally so, the cycles will be more ordered than before (and hence less prone to sharp peaks, or extreme troughs).