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October 23, 2001

It's Adjustment Time For America's Entrepreneurs As New Economy goes On The Back Burner

America has lived for over two decades without a serious threat; nothing so captured American confidence in the wake of Communism's collapse as the expansion of global trade and the flood of U.S. investment into developing nations in the '90s.

The globalized economy was considered one of the crowning achievements of the last decade's burgeoning growth, where it looked like the world economy would grow indefinitely.

How fast things can change...now it looks like the private sector, whose entrepreneurial enthusiasm defined the passing age, will become more controlled and slowed. The whole movement toward deregulation and entrepreneurship is in for big changes.

So the deregulated, wired, just-in-time, globalized "new economy" of the '90s is suddenly being placed on the back burner. In its place will be a re-emergence of the "bigger-is-better" argument.

We will be spending an awful lot of money in the years ahead to guard against the terrorists, as the government's role returns with a vengeance--as warrior, regulator, economic manager, and big spender.

The changes we experience will be dramatic, and the strategy emanating from Washington, DC, will have a tremendous effect not only on America's entrepreneurs but the rest of the global economic framework as well.


Trucking Industry A Barometer For The Economy

Although some thought truckers would benefit from the disruption in the airline industry, that wasn't so. They've been disrupted by increased security measures, plus a weakening demand from the manufacturing and retail sectors.

Even prior to the Sept. 11 attack we've seen more trucking available on a bartered basis in the US, and the resulting downturn will see more availability.

The trucking industry is typically one of the first sectors to indicate a downturn or recovery in the economy--usually three to four months in advance.


International Trade An Important Priority That Creates Wealth

Secretary of State Colin Powell is a major proponent and believer that America's prosperity depends on trade, which accounts for over 25% of our economic growth over the past decade, and supports an estimated 12 million high-paying jobs.

Additionally, Powell affirms that trade helps create a secure international environment by creating wealth in developing countries, supporting personal freedom, and promoting international responsibility. Therefore international trade should be our #1 priority.


Globalization Remains Imperative In America's Heartland

"Most businesses have too much riding on globalization to give up on it now," is the attitude in Cleveland, a heartland industrial city that epitomizes how the fortunes of many US companies have become linked to the global economy.

A recent survey of US business executives found two-thirds expected their investments in factories and other business assets abroad next year will equal this year's level. And 16% expected to invest more.

Diane Swonk, chief economist at Bank One Corp. in Chicago, says, "I think companies are more resolved than ever to be global, they see opportunities in this."

One danger is that concerns about terror could further cleave the world between those areas deemed suitable for US investment and involvement and those that aren't. The result could be a growing split between the have's and the have-not's in the world's economies.


Asia-Pacific Economic Cooperation Forum A Success

China wanted to make the recent APEC meeting a success, and they succeeded, as economic cooperation took center stage. The meeting in Shanghai was a prelude to China's entry into the WTO (World Trade Organization), and focused on the need to get the world's economy back on track.

The 21 members of APEC are said to account for 44% of global trade. But most important at the meeting was the group's effort and determination to help Russia and China move forward so they can make greater contributions to global economic growth.

Incredible Security In Shanghai

China's second-most populous city, boasting nearly 15 million residents, went to some unusual lengths to guarantee security. A five-day holiday was declared, and local officials all but ordered people to stay home. They sealed off most roads and shut down the city's subway and other public transportation as an added precaution.

Chinese authorities also delayed the issuance of visas to people from the Middle East and ordered its airlines not to sell tickets to people from 12 Middle Eastern countries.


Here And There. . .

  • Trade exchange owners looking for an easy way to motivate their client base and stimulate more trade activity among their clients can obtain a copy of the 15-year-old, proven, informational marketing tool--The Competitive Edge newsletter. E-mail to bmeyer@barternews.com for a sample copy and details. (Be sure to include your complete mailing address in your e-mail...this is not an e-mail newsletter.)

  • Dr. Ezekiel J. Emanuel, an oncologist and bioethicist, stresses we should chill out on the Anthrax issue. For the average American, he contends, the chance of an anthrax-filled letter is less than one in a billion...substantially less than the risk of being struck by lightening, which is about one in 600,000 in a year.

  • As the world's largest marketplace for connecting buyers and sellers, eBay continues to grow and is increasingly being used by traditional retailers, manufacturers, and liquidators seeking to reduce inventories and sell refurbished or returned goods.

    Being such an efficient online channel for moving unsold stock means the San Jose-based Internet company is a growing competitor to the barter marketplace, especially corporate barter.

  • Conseco Capital Management, which oversees $30 billion in assets for various clients including mutual funds, foundations and insurance companies, sees more hard times. A spokesman for the company foresees that any business tax cuts will cause corporations to pocket the money or pay off debts, rather than use the funds for capital spending.

  • The Federal Government outsold Amazon.com online last year, according to a joint study by Federal Computer Week and the Pew Internet & American Life Project. What was touted as the first study of its kind found that the US government sold more than $3.6 billion in products and property via the Internet, compared with $2.8 billion generated by Amazon.com.

  • The US meetings industry is a $96 billion annual business with nearly 100 million people flocking to more than 1.2 million conferences, seminars, corporate meetings, trade shows and conventions.

 

We welcome your comments, questions, and observations.
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