Global Economic rundown How We can improve global efficiency
Current & Projected GDP Growth & Unemployment
How are different Economies responding?
Measuring response effectiveness
How to improve Global economic efficiency?
GDP Growth & Unemployment Global GDP % Change Global Unemployment % rate Source: NBER
US v Europe
For maximum productive efficiency US is extremely quick to ‘layoff’ employees
There are relatively few employee protection laws in the US v Europe
When the US turns around in 2010, it will have to hire quickly to respond
Europe is typically very slow to layoff employees – ‘Socialist’ employment laws
There is a looming Europe-wide gap between too low GDP to justify such high employment
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
German unemployment rate stable whilst GDP slumps Shortfall between GDP decline - Unemployment rate unchanged
Differing response to the same problem?
US Companies geared exclusively toward ‘shareholder value’ & short term quarterly targets
European companies’ articles state a range of responsibilities including – employees, consumers, community & environment
Perhaps some US firms are using the downturn as an ‘excuse’ to layoff ‘unproductive’ employees?
Explains strong recent quarterly results for US companies
‘ Unproductive’10% is gone, leaving US firms leaner & more efficient?
How could we improve Global Economic efficiency?
Become more vigorous in making tough decisions to respond to the economy
Don’t be ‘afraid’ to spend money or make quick decisions
- More is lost due to indecision than wrong decision!
Become more flexible – adapt rather than ‘hanging on’ to out-dated models & personnel – Both management & regular employees
US has a strong entrepreneurial culture unlike much of Europe - Do not be afraid of failure!
‘ Success is going from failure to failure without loss of enthusiasm’ Winston Churchill
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%
Assumptions are based on the projections for Global economies to 2010