I've been avidly following Robert Peston's coverage of the economic crisis. Peston is the BBC's business editor and has built a stellar reputation for reporting the key facts on what went so massively wrong and what we can do to emerge from this crisis. His recent BBC radio discussion with Robert Wolf, Financial Times's chief economic commentator, Richard Lambert, director general of the CBI and Roger Carr, the chairman of Centrica and Cadbury, is well worth hearing. Key points discussed:
The UK is the most vulnerable economy, due to its unprecedented housing bubble and over-reliance on the financial services sector.
The strong sense of denial is fading – there aren't going to be any winners out of all this, just relative advantage.
Not everyone yet grasps this is a massive structural change – we're not going back to 2006. The massive consumer-led debt boom cannot be repeated. We might go back to fast growth, but the whole pattern of global demand will have to be different for that to happen. The world economy will have to be re-balanced in different ways.
We've done a very good job of driving short-term stimulus and saved the banking system, but the long-term solution has to be the restoration of healthy private sector demand across the world: that is the next stage of getting back to a healthy economy…but does the private sector understand this? There is an increasing awareness that we are interdependent. Unless the strong support the frail we will have continuing difficulty.
We must protects the emerging economies now and change the way we finance them. The IMF resources need to be bigger to protect developing economies.
We need to have serious intelligent dialog with the Chinese on how to make their growth more compatible with global stability.
All-in-all, you can really start to guage how crucial the role global sourcing has to play as we emerge in a new economic structure. The inter-dependencies across economies and businesses can be managed more effectively by firms adopting multi-cultural, multi-lingual and multi-regional delivery models. Both governments and businesses need to embrace both local and global talent to restore private sector demand over the long-term. What is abundantly clear is that we don't fully realize how this structure will ultimately develop, but we are quickly understanding the basics of what needs to change. The next stage is for both governments and business to work together on stimulating long-term demand and making these inter-dependencies really function effectively.
Posted in : Business Process Outsourcing (BPO)