A wild take on the economy
Sunday, November 7, 2010
Two years ago, with Lehman Brothers in bankruptcy, stocks in free fall and local home prices dropping, Professor U.N. Umesh surveyed the economic landscape and saw a stampeding herd of wildebeests.
“The wildebeests can’t see into the distance and instead take their cues from those around them,” Umesh, who teaches marketing and entrepreneurship classes at Washington State University Vancouver, said in October 2008.
That panicked stampede has passed, and now Umesh has a new set of African wildlife metaphors to describe the economy in Clark County and the U.S.
Many large companies are now in the black and posting enviable profits. Many smaller businesses are still struggling, however. Clark County’s jobless rate is above 12 percent. The recession is officially over, but we still face what Umesh calls “white spaces of everlasting uncertainty.”
Alternate these white spaces of uncertainty with in-the-black corporate profits, and Umesh sees a zebra economy. It’s not a perfect metaphor. At some point the white stripes of uncertainty will turn black. Most economists agree that we’ve got a long, slow slog ahead of us, however, so we’ve got a while before we really need to worry about changing the zebra economy’s stripes. In a land where zebras are prey, let’s just worry about staying away from the lions.
Those lions are the forces that threaten our already tenuous recovery. Umesh said they include:
• Consumers and companies that hoard cash, rather than buying goods or hiring workers.
• Banks that have tightened credit so much that healthy businesses can’t get a loan.
• European governments that now face crises linked to debt.
• Meddling U.S. politicians who may not understand the consequences of their actions.
To avoid these risks, we need to outrun the lions.
The country has done it before by boosting productivity, through improvements to current processes and also through technological innovations. This needs to be part of the solution again, but will only get us so far.
Umesh’s prescriptions for long-term sustainable growth have been on Clark County’s wish list since long before the wildebeests and zebras began making trouble.
We need better funding options for local startups. Portland and Vancouver lack the networks of venture capitalists available in San Francisco and Seattle. Programs like Venture Northwest, where Camas-based mobba was a finalist on Thursday, are trying to address this shortcoming, but there’s a lot of work still to be done.
We need more science, math and engineering graduates. WSUV is adding new programs, and local tech leaders have stepped forward to mentor high school kids. More students need to step up and enroll.
And we need to continue our efforts to recruit high-tech companies to Clark County from around the country and around the world.
These solutions will aid in the region’s recovery, and also build a robust economic foundation that could help us better weather the next recession. Or as Umesh put it, “Do right, and the lion won’t get the zebra.”
Courtney Sherwood is The Columbian’s business and features editor. Reach her at 360-735-4561 or email@example.com.