Welcome!

@CloudExpo Authors: Liz McMillan, Pat Romanski, Elizabeth White, Yeshim Deniz, Charles Araujo

News Feed Item

Companies Banking on Quick Recovery Risk Making the Same Mistakes as Companies That Failed During the Great Depression, Says Boston Consulting Group Report

Study of More Than 60 Leading Indicators Worldwide Shows That Talk of 'Green Shoots' Is Premature as Global Economy Continues to Decline

BOSTON, MA -- (Marketwire) -- 06/15/09 -- Chief executives risk falling into the same trap as those among their predecessors in the Great Depression who were too quick to call the end of the downturn, according to the findings of a report released today by The Boston Consulting Group (BCG).

In "Green Shoots, False Positives, and What Companies Can Learn from the Great Depression," BCG found that, for all the talk of "green shoots" today, most of the popular leading economic indicators show that the world economy is still shrinking -- if at a slower rate than at the beginning of the year.

It warns CEOs to guard against the kind of hasty optimism -- based on an excessive reliance on one or two promising indicators -- that undermined some companies during the Great Depression. In June 1930, after a stock market rally that saw the S&P regain 60 percent of its lost value, Herbert Hoover, the U.S. president, confidently announced that "the depression is over."

In a study of 61 leading economic indicators in five of the world's largest economies -- the United States, Germany, France, the United Kingdom, and Japan -- BCG found that only five are in the "clearly positive" category. Another 15 are in the "positive trend but too early to confirm" category. The rest are ranked among either those showing some deceleration in the rate of decline but no consistent upturn (36) or those continuing to show a consistently negative trend (5).

Although this represents an improvement -- 37 of the 61 indicators were ranked in the most negative category in December 2008 -- the report's authors conclude that there are few signs that the global economy is back on a positive trajectory. They warn that nearly half of all the indicators showing signs of an upturn are driven by monetary policy. Of those indicators that are not related to monetary policy initiatives, less than a quarter have shown any positive sparks.

Daniel Stelter, global leader of BCG's Corporate Development practice and coauthor of the report, said, "In recent conversations at companies the world over, we have detected a change in the mindset of many executives. Many seem to be adopting a more optimistic economic outlook. They tell us that they see 'green shoots.' But although government intervention means that we are unlikely to see the bank failures that contributed to the paralysis of the 1930s, we should nonetheless learn from President Hoover's hubris -- and take it as a warning to be cautious about any premature celebrations of the upturn."

Major Risks Remain

BCG's report, part of its ongoing "Collateral Damage" series of papers on the downturn, also points to a set of factors which suggest that, even when the green shoots do start appearing, the recovery will be sluggish.

-- The empirical evidence is discouraging: similar recessions have lasted seven quarters, on average

-- The deleveraging of the U.S. consumer has barely begun

-- Credit is not flowing yet

-- The banks have not been restored to health

-- The not-so-stressful "stress test": the U.S. government's stress test was more a negotiation than a true assessment of banks' health

-- Governments do not have unlimited resources

David Rhodes, global leader of BCG's Financial Institutions practice and coauthor of the report, said, "For us, the key issue is not the precise timing of the upturn but the nature of the recovery. We expect this upturn to be sluggish -- as with all upturns after a recession that is synchronized around the globe and preceded by systemic financial stress. And in a sluggish economy, trading conditions will be tougher, competitive advantage more important, and broken business models exposed."

BCG's "Collateral Damage" Series

Based on its long history of helping companies survive and thrive during global economic downturns, BCG created its "Collateral Damage" series, which explores the "new realities" of a world in crisis. The series is providing a big-picture analysis of the crisis as it evolves in different regions, countries, and sectors. It offers senior executives practical guidance for protecting their companies from the worst of the crisis and preparing them for economic recovery.

Current titles in the series include:

-- Collateral Damage: What the Crisis in the Credit Markets Means for Everyone Else

-- Collateral Damage, Part 2: Taking Robust Action in the Face of the Growing Crisis

-- Collateral Damage, Part 3: Asia, Advantage, and Action

-- Collateral Damage, Part 4: Preparing for a Tough Year Ahead: The Outlook, the Crisis in Perspective, and Lessons from the Early Movers

-- Collateral Damage, Part 5: Confronting the New Realities of a World in Crisis

-- Collateral Damage, Part 6: Underestimating the Crisis

To receive a copy of the report or arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or [email protected].

About The Boston Consulting Group

The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries. For more information, please visit www.bcg.com.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@CloudExpo Stories
In his session at 21st Cloud Expo, Michael Burley, a Senior Business Development Executive in IT Services at NetApp, described how NetApp designed a three-year program of work to migrate 25PB of a major telco's enterprise data to a new STaaS platform, and then secured a long-term contract to manage and operate the platform. This significant program blended the best of NetApp’s solutions and services capabilities to enable this telco’s successful adoption of private cloud storage and launching o...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settl...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, examined the regulations and provided insight on how it affects technology, challenges the established rules and will usher in new levels of diligence arou...
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
It is ironic, but perhaps not unexpected, that many organizations who want the benefits of using an Agile approach to deliver software use a waterfall approach to adopting Agile practices: they form plans, they set milestones, and they measure progress by how many teams they have engaged. Old habits die hard, but like most waterfall software projects, most waterfall-style Agile adoption efforts fail to produce the results desired. The problem is that to get the results they want, they have to ch...
Organizations planning enterprise data center consolidation and modernization projects are faced with a challenging, costly reality. Requirements to deploy modern, cloud-native applications simultaneously with traditional client/server applications are almost impossible to achieve with hardware-centric enterprise infrastructure. Compute and network infrastructure are fast moving down a software-defined path, but storage has been a laggard. Until now.
In his session at 20th Cloud Expo, Mike Johnston, an infrastructure engineer at Supergiant.io, discussed how to use Kubernetes to set up a SaaS infrastructure for your business. Mike Johnston is an infrastructure engineer at Supergiant.io with over 12 years of experience designing, deploying, and maintaining server and workstation infrastructure at all scales. He has experience with brick and mortar data centers as well as cloud providers like Digital Ocean, Amazon Web Services, and Rackspace. H...
DXWorldEXPO LLC announced today that All in Mobile, a mobile app development company from Poland, will exhibit at the 22nd International CloudEXPO | DXWorldEXPO. All In Mobile is a mobile app development company from Poland. Since 2014, they maintain passion for developing mobile applications for enterprises and startups worldwide.
Digital Transformation is much more than a buzzword. The radical shift to digital mechanisms for almost every process is evident across all industries and verticals. This is often especially true in financial services, where the legacy environment is many times unable to keep up with the rapidly shifting demands of the consumer. The constant pressure to provide complete, omnichannel delivery of customer-facing solutions to meet both regulatory and customer demands is putting enormous pressure on...
The best way to leverage your CloudEXPO | DXWorldEXPO presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering CloudEXPO | DXWorldEXPO will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at CloudEXPO. Product announcements during our show provide your company with the most reach through our targeted audienc...
With 10 simultaneous tracks, keynotes, general sessions and targeted breakout classes, @CloudEXPO and DXWorldEXPO are two of the most important technology events of the year. Since its launch over eight years ago, @CloudEXPO and DXWorldEXPO have presented a rock star faculty as well as showcased hundreds of sponsors and exhibitors!
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smart...
FinTechs use the cloud to operate at the speed and scale of digital financial activity, but are often hindered by the complexity of managing security and compliance in the cloud. In his session at 20th Cloud Expo, Sesh Murthy, co-founder and CTO of Cloud Raxak, showed how proactive and automated cloud security enables FinTechs to leverage the cloud to achieve their business goals. Through business-driven cloud security, FinTechs can speed time-to-market, diminish risk and costs, maintain continu...
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
The Jevons Paradox suggests that when technological advances increase efficiency of a resource, it results in an overall increase in consumption. Writing on the increased use of coal as a result of technological improvements, 19th-century economist William Stanley Jevons found that these improvements led to the development of new ways to utilize coal. In his session at 19th Cloud Expo, Mark Thiele, Chief Strategy Officer for Apcera, compared the Jevons Paradox to modern-day enterprise IT, examin...
The taxi industry never saw Uber coming. Startups are a threat to incumbents like never before, and a major enabler for startups is that they are instantly “cloud ready.” If innovation moves at the pace of IT, then your company is in trouble. Why? Because your data center will not keep up with frenetic pace AWS, Microsoft and Google are rolling out new capabilities. In his session at 20th Cloud Expo, Don Browning, VP of Cloud Architecture at Turner, posited that disruption is inevitable for comp...
DXWorldEXPO LLC announced today that ICC-USA, a computer systems integrator and server manufacturing company focused on developing products and product appliances, will exhibit at the 22nd International CloudEXPO | DXWorldEXPO. DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City. ICC is a computer systems integrator and server manufacturing company focused on developing products and product appliances to meet a wide range of ...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
The next XaaS is CICDaaS. Why? Because CICD saves developers a huge amount of time. CD is an especially great option for projects that require multiple and frequent contributions to be integrated. But… securing CICD best practices is an emerging, essential, yet little understood practice for DevOps teams and their Cloud Service Providers. The only way to get CICD to work in a highly secure environment takes collaboration, patience and persistence. Building CICD in the cloud requires rigorous ar...
Sanjeev Sharma Joins November 11-13, 2018 @DevOpsSummit at @CloudEXPO New York Faculty. Sanjeev Sharma is an internationally known DevOps and Cloud Transformation thought leader, technology executive, and author. Sanjeev's industry experience includes tenures as CTO, Technical Sales leader, and Cloud Architect leader. As an IBM Distinguished Engineer, Sanjeev is recognized at the highest levels of IBM's core of technical leaders.