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

Top 4 Biggest Problems Selling Access Control on Mar 23, 2018
We received 150+ responses from integrators when we asked them "What is the biggest problem you face when selling electronic access control?...
US / China Tariffs Impact on Video Surveillance on Mar 23, 2018
On March 22, 2018, the US issued a Presidential Memorandum on the Actions by the United States Related to the Section 301 Investigation, with 3...
Final Day - Save $50 - April 2018 IP Networking Course on Mar 22, 2018
Today, March 22nd is the last day to save $50. Register now and save. NEW - 2 sessions per class, 'day' and 'night' to give you double the chance...
Favorite Access Control Credentials 2018 on Mar 22, 2018
In this 2018 access integrator statistics result, which credential type holds the favored spot to unlock access doors? More than 150 integrators...
ISC West Bans Booth Babes on Mar 22, 2018
Booth babes, goodbye. Technically, ISC West banned them 2 years ago with a 'staffing attire' requirement but it looks like ISC West is going to...
Network Racks For Surveillance Guide on Mar 21, 2018
In this guide, we look at network rack infrastructure, one of the fundamentals of IP video surveillance. Inside, we cover: What is a rack unit...
Security Robot Sales Struggle on Mar 21, 2018
2 year ago, PSA Security CEO Bill Bozeman called security robots one of “the biggest game changers” in decades for security integrators. Just over...
Dahua Global Launch LeChange on Mar 20, 2018
Dahua is getting into the consumer video surveillance market globally, with "LeChange", an offering long available inside of China is now being...
Axis Z-Wave IP Camera Tested Poorly on Mar 20, 2018
Z-Wave is drawing notable interest for video surveillance use. In IPVM's initial coverage, 84% expressed interest in it, with nearly half being...

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