How bad is it?

Communications News, Dec, 2008 by Ken Anderberg

Judging the severity of the current economic situation versus some recent downturns is difficult. Are today's events worse than the early 1970s when we had price and wage freezes, and hours-long lines for gasoline as the price of a gallon doubled in a short period of time? In 1975, national unemployment reached 9 percent, well below current levels, and inflation rose to 9.1 percent.

Are today's events worse than the recession of the early 1980s, when inflation soared to 13.5 percent, unemployment hit 10.8 percent and the prime interest rate reached 21.5 percent? Or worse than Black Monday in 1987, when, in one day, the Dow Jones dropped 22.6 percent, a collapse larger than in 1929. High unemployment, massive government budgetary deficits, and slow gross domestic product growth affected the United States until late 1992.

Were the early years of this century worse, when first the Nasdaq crashed in the dot-corn bubble fiasco and then economic activity virtually came to a standstill after the attacks of Sept. 11, 2001?

For sure, this is a difficult economic period, regardless of historic comparisons. Job losses in many industries will continue. Companies will fail. In the IT sector, expect to see at least one, perhaps two, of the current weekly magazines quit their print editions and retreat to the Web. Also expect one or more magazines serving vertical technology industries (e.g., security, storage, telephony) to go the same route.

Customers will still be buying tech gear in 2009, however; they will just be a little more discerning on their expenditures. Return on investment will be even more important to these customers. Hot new technologies with unproven ROI track records may have to wait until the economy turns around.

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Expect crowds at technology trade shows next year to be lighter, with events featuring fewer exhibitors. Reaching customers through trade magazines (those that are still standing) and the Internet will take on new emphasis, as customers and vendors reduce their travel budgets and face-to-face time decreases.

And expect a change in marketing to these customers, with ROI becoming the dominant theme. Green technology energy savings, for example, will be a hot ticket. It should be an interesting year.

kanderberg@comnews.com