Is the Recession Really Over?

Author: John Honovich, Published on Nov 06, 2009

Optimism continues to increase about a growing global economy and a rebounding security industry. There's little doubt that spending is heading back up across the globe after significant losses in the past 12 months. And, no doubt, more spending is better for businesses. [See a SSN segment interviewing security professionals on the receding recession.]

Will Rising Spending Last?

Rising spending does not guarantee long term economic growth. Indeed, rising spending can mask major problems. For instance, so much of recent US economic growth comes from the housing credit and the "Cash for Clunkers" program.

A Child Example

Imagine a 10 year old who measures success based on eating candy. The child uses his allowance to buy candy.

The child does not do his homework and the parent cuts the child's allowance.

At first, the child eats less candy and is depressed. Then the child returns to eating the same amount of candy by digging into his stash of candy and borrowing candy from his school friends. However, the child does not start doing his homework.

The child is back to easting as much candy as before but is this really a healthy situation?

The Future of the Global Economy

Making business decisions and forecasting industries is faced with similar uncertainty (as we note in our own IP video market forecast).

We see 3 possible paths:

  1. There never was any fundamental economic problems, this was just a regular recession and the economy should recover strongly and stably. That is, the child was doing their homework.
  2. There are fundamental economic problems but the short term spending is holding us over until we fix those problems. That is, the child is eating candy from his stash but will soon start doing homework and will be fine in the long term.
  3. There are fundamental problems, those problems are not being resolved and the short term spending is simply covering up the lack of progress. That is, the child is going to be in serious trouble as he runs out of his stash of candy and still does not do his homework.

If you are making business decisions, it's important that you determine your position on these paths. At least in the US, path 1 seems to be completely unrealistic. The problems were almost certainly fundamental and the only question is whether or not we are actually resolving them.

This goes beyond any specific industry but drives the future of all industries.

Most Recent Industry Reports

Instant Cloud For Hikvision - Manything on Apr 28, 2017
One ISC West exhibitor had a very specific and clear pitch - cloud for Hikvision: In this note, we examine their offering, key differentiators,...
Milestone GPU Enhanced VMD Tested on Apr 28, 2017
In their 2017 XProtect release, Milestone announced support for hardware accelerated video motion detection, touting a 2X increase in server...
Burglar Alarm Zoning Guide on Apr 28, 2017
The function of an alarm panel is to gather information from sensors and respond to this information by triggering actions. While it is possible to...
Avigilon Discontinuing Rialto Analytics Line on Apr 27, 2017
Avigilon is informing dealers/partners that the legacy VideoIQ Rialto products have been discontinued, recommending the newer ACC ES Analytics...
A Marketing Home Run For Knightscope - Man Attacks Robot on Apr 27, 2017
We criticize Knightscope regularly - their lack of revenue, their trying to fool mom 'n pop investors, their associating themselves with a clueless...
The World's First Fashion IP Camera From Amazon on Apr 27, 2017
Some analytics cameras can tell you if a person is jumping a fence, or loitering in a secure area, but none of them can tell you if the person...
Last Day - IP Networking Course May 2017 on Apr 26, 2017
Today is the last day to register for the May IP Networking Course. This is the only networking course designed specifically for video...
Hikvision EZVIZ Amazon Scam Revealed on Apr 26, 2017
Hikvision is violating US Federal Trade Commission guidelines and Amazon rules with a "Honest" Review Program scheme that provides gift cards to...
Anixter CEO Admits Price Deflation and Non-Exclusive Integrator Sales on Apr 26, 2017
Anixter's CEO has admitted to (1) price deflation impacting IP camera sales and (2) not always being 'exclusive' with security integrators. In...
Xandem Next Gen Intrusion Tested on Apr 26, 2017
Xandem's "full coverage motion tracking technology" is unlike any intrusion technology we have seen. We bought their new system and tested it...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact