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BUSINESS NEWS
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When what was billed as the worst downturn in 75 years struck, it hit Australia hard and corporates big and small had to act fast to protect themselves.
Some went the conventional way, slashing marketing, research and development, capital investment and staff. Others were more imaginative and focussed on the opportunities offered by the latest cycle of bust and recovery.
More than 57% of managers in a recent Australian Industry Group survey cited reducing operational costs as a highly important response to the GFC. More than 68% focussed on boosting sales of existing products, a strategy which may be futile when consumers are withdrawing from the market. Approaches with greater long-term benefit to revenue, such as developing new markets, products and se
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The big lesson [about the current GFC] is that if you do the opposite of what they did in the 1930s during the Great Depression, it looks like you can actually avoid many of the worst consequences.
In the 1930s, accepted wisdom was that banks should be allowed to collapse and governments should concentrate on balancing their budgets. "High costs of living will come down; people will work harder, live a more moral life; values will be adjusted, and enterprising people will pick up the wrecks from less competent people."
This time, the world decided to spend and lend its way out of crisis - the patient is still in intensive care but most forecasters are now predicting the global economy will start to recover precisely because we didn't repeat the policies of the 1930s.
Another
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