Global Economic Rundown

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Global Economic Rundown

  1. 1. Global Economic rundown How We can improve global efficiency <ul><li>Current & Projected GDP Growth & Unemployment </li></ul><ul><li>How are different Economies responding? </li></ul><ul><li>Measuring response effectiveness </li></ul><ul><li>How to improve Global economic efficiency? </li></ul>
  2. 2. GDP Growth & Unemployment Global GDP % Change Global Unemployment % rate Source: NBER
  3. 3. US v Europe <ul><li>For maximum productive efficiency US is extremely quick to ‘layoff’ employees </li></ul><ul><li>There are relatively few employee protection laws in the US v Europe </li></ul><ul><li>When the US turns around in 2010, it will have to hire quickly to respond </li></ul><ul><li>Europe is typically very slow to layoff employees – ‘Socialist’ employment laws </li></ul><ul><li>There is a looming Europe-wide gap between too low GDP to justify such high employment </li></ul>
  4. 4. US unemployment is growing exponentially whilst GDP decline is projected to be in recovery shortly Shortfall between unemployment & GDP growth post recession Pre recessionary GDP Growth/Unemployment gap
  5. 5. German unemployment rate stable whilst GDP slumps Shortfall between GDP decline - Unemployment rate unchanged
  6. 6. Differing response to the same problem? <ul><li>US Companies geared exclusively toward ‘shareholder value’ & short term quarterly targets </li></ul><ul><li>European companies’ articles state a range of responsibilities including – employees, consumers, community & environment </li></ul><ul><li>Perhaps some US firms are using the downturn as an ‘excuse’ to layoff ‘unproductive’ employees? </li></ul><ul><li>Explains strong recent quarterly results for US companies </li></ul><ul><li>‘ Unproductive’10% is gone, leaving US firms leaner & more efficient? </li></ul>
  7. 7. How could we improve Global Economic efficiency? <ul><li>Become more vigorous in making tough decisions to respond to the economy </li></ul><ul><li>Don’t be ‘afraid’ to spend money or make quick decisions </li></ul><ul><li>- More is lost due to indecision than wrong decision! </li></ul><ul><li>Become more flexible – adapt rather than ‘hanging on’ to out-dated models & personnel – Both management & regular employees </li></ul><ul><li>US has a strong entrepreneurial culture unlike much of Europe - Do not be afraid of failure! </li></ul><ul><li>‘ Success is going from failure to failure without loss of enthusiasm’ Winston Churchill </li></ul>
  8. 8. US Unemployment rates – Democrats v Republicans Unsurprisingly Democrats have a better record on US unemployment rates Democrat Republican Overall rate increased though ‘Professional’ Unemployment fell Unemployment down from 7.5 – 4%
  9. 9. <ul><li>Assumptions are based on the projections for Global economies to 2010 </li></ul><ul><li>- NBER </li></ul><ul><li>- The Economist </li></ul><ul><li>Markets are unpredictable….. </li></ul><ul><li>And so are people! </li></ul>

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