Welcome!

Industrial IoT Authors: Pat Romanski, Mark Herring, Derek Weeks, Stackify Blog, Yeshim Deniz

News Feed Item

Companies Banking on Quick Recovery Risk Making the Same Mistakes as Companies That Failed During the Great Depression, Says Boston Consulting Group Report

Study of More Than 60 Leading Indicators Worldwide Shows That Talk of 'Green Shoots' Is Premature as Global Economy Continues to Decline

BOSTON, MA -- (Marketwire) -- 06/15/09 -- Chief executives risk falling into the same trap as those among their predecessors in the Great Depression who were too quick to call the end of the downturn, according to the findings of a report released today by The Boston Consulting Group (BCG).

In "Green Shoots, False Positives, and What Companies Can Learn from the Great Depression," BCG found that, for all the talk of "green shoots" today, most of the popular leading economic indicators show that the world economy is still shrinking -- if at a slower rate than at the beginning of the year.

It warns CEOs to guard against the kind of hasty optimism -- based on an excessive reliance on one or two promising indicators -- that undermined some companies during the Great Depression. In June 1930, after a stock market rally that saw the S&P regain 60 percent of its lost value, Herbert Hoover, the U.S. president, confidently announced that "the depression is over."

In a study of 61 leading economic indicators in five of the world's largest economies -- the United States, Germany, France, the United Kingdom, and Japan -- BCG found that only five are in the "clearly positive" category. Another 15 are in the "positive trend but too early to confirm" category. The rest are ranked among either those showing some deceleration in the rate of decline but no consistent upturn (36) or those continuing to show a consistently negative trend (5).

Although this represents an improvement -- 37 of the 61 indicators were ranked in the most negative category in December 2008 -- the report's authors conclude that there are few signs that the global economy is back on a positive trajectory. They warn that nearly half of all the indicators showing signs of an upturn are driven by monetary policy. Of those indicators that are not related to monetary policy initiatives, less than a quarter have shown any positive sparks.

Daniel Stelter, global leader of BCG's Corporate Development practice and coauthor of the report, said, "In recent conversations at companies the world over, we have detected a change in the mindset of many executives. Many seem to be adopting a more optimistic economic outlook. They tell us that they see 'green shoots.' But although government intervention means that we are unlikely to see the bank failures that contributed to the paralysis of the 1930s, we should nonetheless learn from President Hoover's hubris -- and take it as a warning to be cautious about any premature celebrations of the upturn."

Major Risks Remain

BCG's report, part of its ongoing "Collateral Damage" series of papers on the downturn, also points to a set of factors which suggest that, even when the green shoots do start appearing, the recovery will be sluggish.

-- The empirical evidence is discouraging: similar recessions have lasted seven quarters, on average

-- The deleveraging of the U.S. consumer has barely begun

-- Credit is not flowing yet

-- The banks have not been restored to health

-- The not-so-stressful "stress test": the U.S. government's stress test was more a negotiation than a true assessment of banks' health

-- Governments do not have unlimited resources

David Rhodes, global leader of BCG's Financial Institutions practice and coauthor of the report, said, "For us, the key issue is not the precise timing of the upturn but the nature of the recovery. We expect this upturn to be sluggish -- as with all upturns after a recession that is synchronized around the globe and preceded by systemic financial stress. And in a sluggish economy, trading conditions will be tougher, competitive advantage more important, and broken business models exposed."

BCG's "Collateral Damage" Series

Based on its long history of helping companies survive and thrive during global economic downturns, BCG created its "Collateral Damage" series, which explores the "new realities" of a world in crisis. The series is providing a big-picture analysis of the crisis as it evolves in different regions, countries, and sectors. It offers senior executives practical guidance for protecting their companies from the worst of the crisis and preparing them for economic recovery.

Current titles in the series include:

-- Collateral Damage: What the Crisis in the Credit Markets Means for Everyone Else

-- Collateral Damage, Part 2: Taking Robust Action in the Face of the Growing Crisis

-- Collateral Damage, Part 3: Asia, Advantage, and Action

-- Collateral Damage, Part 4: Preparing for a Tough Year Ahead: The Outlook, the Crisis in Perspective, and Lessons from the Early Movers

-- Collateral Damage, Part 5: Confronting the New Realities of a World in Crisis

-- Collateral Damage, Part 6: Underestimating the Crisis

To receive a copy of the report or arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or [email protected].

About The Boston Consulting Group

The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries. For more information, please visit www.bcg.com.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
Smart cities have the potential to change our lives at so many levels for citizens: less pollution, reduced parking obstacles, better health, education and more energy savings. Real-time data streaming and the Internet of Things (IoT) possess the power to turn this vision into a reality. However, most organizations today are building their data infrastructure to focus solely on addressing immediate business needs vs. a platform capable of quickly adapting emerging technologies to address future ...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
Cloud Expo | DXWorld Expo have announced the conference tracks for Cloud Expo 2018. Cloud Expo will be held June 5-7, 2018, at the Javits Center in New York City, and November 6-8, 2018, at the Santa Clara Convention Center, Santa Clara, CA. Digital Transformation (DX) is a major focus with the introduction of DX Expo within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive ov...
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, examined the regulations and provided insight on how it affects technology, challenges the established rules and will usher in new levels of diligence arou...
In his session at 21st Cloud Expo, Raju Shreewastava, founder of Big Data Trunk, provided a fun and simple way to introduce Machine Leaning to anyone and everyone. He solved a machine learning problem and demonstrated an easy way to be able to do machine learning without even coding. Raju Shreewastava is the founder of Big Data Trunk (www.BigDataTrunk.com), a Big Data Training and consulting firm with offices in the United States. He previously led the data warehouse/business intelligence and B...
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. In his session at @BigDataExpo, Jack Norris, Senior Vice President, Data and Applications at MapR Technologies, reviewed best practices to ...
"Digital transformation - what we knew about it in the past has been redefined. Automation is going to play such a huge role in that because the culture, the technology, and the business operations are being shifted now," stated Brian Boeggeman, VP of Alliances & Partnerships at Ayehu, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Synametrics Technologies will exhibit at SYS-CON's 22nd International Cloud Expo®, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. Synametrics Technologies is a privately held company based in Plainsboro, New Jersey that has been providing solutions for the developer community since 1997. Based on the success of its initial product offerings such as WinSQL, Xeams, SynaMan and Syncrify, Synametrics continues to create and hone inn...
"Evatronix provides design services to companies that need to integrate the IoT technology in their products but they don't necessarily have the expertise, knowledge and design team to do so," explained Adam Morawiec, VP of Business Development at Evatronix, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
The 22nd International Cloud Expo | 1st DXWorld Expo has announced that its Call for Papers is open. Cloud Expo | DXWorld Expo, to be held June 5-7, 2018, at the Javits Center in New York, NY, brings together Cloud Computing, Digital Transformation, Big Data, Internet of Things, DevOps, Machine Learning and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding busin...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
Nordstrom is transforming the way that they do business and the cloud is the key to enabling speed and hyper personalized customer experiences. In his session at 21st Cloud Expo, Ken Schow, VP of Engineering at Nordstrom, discussed some of the key learnings and common pitfalls of large enterprises moving to the cloud. This includes strategies around choosing a cloud provider(s), architecture, and lessons learned. In addition, he covered some of the best practices for structured team migration an...
No hype cycles or predictions of a gazillion things here. IoT is here. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, an Associate Partner of Analytics, IoT & Cybersecurity at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He also discussed the evaluation of communication standards and IoT messaging protocols, data...
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, discussed how they built...
SYS-CON Events announced today that Evatronix will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Evatronix SA offers comprehensive solutions in the design and implementation of electronic systems, in CAD / CAM deployment, and also is a designer and manufacturer of advanced 3D scanners for professional applications.
22nd International Cloud Expo, taking place June 5-7, 2018, at the Javits Center in New York City, NY, and co-located with the 1st DXWorld Expo will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud ...
22nd International Cloud Expo, taking place June 5-7, 2018, at the Javits Center in New York City, NY, and co-located with the 1st DXWorld Expo will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud ...
DevOps at Cloud Expo – being held June 5-7, 2018, at the Javits Center in New York, NY – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real results. Among the proven benefits,...
@DevOpsSummit at Cloud Expo, taking place June 5-7, 2018, at the Javits Center in New York City, NY, is co-located with 22nd Cloud Expo | 1st DXWorld Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait...
SYS-CON Events announced today that T-Mobile exhibited at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. As America's Un-carrier, T-Mobile US, Inc., is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The Company's advanced nationwide 4G LTE network delivers outstanding wireless experiences to 67.4 million customers who are unwilling to compromise on qua...