Uncertainty of Economic Growth Remains

by Steve McKee

The National Federation of Independent Business (NFIB) says that small business optimism grew slightly in January. Slightly. The NFIB Optimism Index currently sits at 89.3, ten points below where it was prior to the recession.

Commenting on the index, Lawrence Mishel, president of the Economic Policy Institute, said:


"To absorb the over 15 million officially unemployed workers in this country... job openings and hirings must rebound dramatically. This report offers no indication that this is happening."


The NFIB's report is consistent with Decision Analyst's January Economic Index, a survey of several thousand households based on nine different economic measurements. The index remained unchanged for the third month in a row, stuck at 94, well below the 110 which signals an economic expansion. This index tends to lead the U.S. economy by up to a year, suggesting the economy will remain sluggish throughout 2010.

That's what the CEO of Unilever, one of the world's largest consumer product companies, is preparing for. Speaking of the economy, Paul Polman says:


"It's not going to just drastically change in the next 12 to 24 months. We will be in for a long and slow recovery, and that's what we're planning our business on."


Policy makers continue to point the finger at the difficulty of securing business credit. But the indexes above suggest the bigger problem is simply a lack of revenue growth, meaning employers simply don't need to hire. That sentiment is borne out by the fact that fewer than one in ten owners surveyed by the NFIB added employees in January, while more than twice as many cut jobs.

Businesses don't want to borrow money as long as economic uncertainty remains high. What we most need now is normalcy, not big ideas. Let's hope the politicians are paying attention.


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Steve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Tomorrow - Bright Idea Birds of a Feather 2.0 - Innovation Conference

Tomorrow I will be lucky enough to attend an international innovation conference via Cisco's TelePresence solution. Brightidea, the software provider behind the successful Cisco I-Prize, is sponsoring the conference with Cisco tomorrow, February 2, 2009.

This Innovation Birds of a Feather conference will bring together innovation leaders both online and via Cisco TelePresence locations in Seattle, London, Silicon Valley, New York, and New Jersey.

The Brightidea Innovation Leaders "Birds of a Feather" Conference is a peer to peer discussion on innovation management among innovation executives and managers at top global corporations. It promises to provide a forum to exchange ideas and best practices on implementing innovation in large organizations.

Companies represented will include: American Express, Astra Zeneca, Safeway, Unilever, Travelers, Merrill Lynch, and more.

The conference will also feature three authors including:

- Mike Kanazawa - "Big Ideas to Big Results"
- Gregg Fraley - "Jack's Notebook"
- Joe Wheeler - "The Ownership Quotient"

I'll try and report on some high level takeaways after the event.

Braden Kelley
@innovate
Blogging Innovation