Like many people, I was very disappointed to hear today that the World Economic Forum (WEF) bumped the United States down from #1 to #2 in their ranking of the world’s most competitive economies. However, if you think about it, it’s been a year since the fall of Lehman Brothers and the subsequent implosion of the market in Q4 2008. I remember hearing the financial news “talking heads” implying a potential repeat of the Great Depression was imminent and all kinds of horrific visions of doom and gloom were being painted for viewers every hour. So, if you think about it, going from #1 to #2 in this environment hardly feels so bad compared to what we were potentially facing in late 2008/early 2009.
The DOW broke 9000 in July and remains steady and rising (I hope). There are those who believe that the worst of the recession is over. We all hope that‘s true. So, who was blamed for the move from #1 to #2 on the WEF ranking? Banking, of course! The report states that the “crash” of the banking system left the US exposed to long-standing weaknesses. You could debate it all day – but there were many variables that contributed to the crash. Further, we saw immediately how significantly the crash impacted the remaining global economy. What happens here sets the wheels in motion for the rest of the world.
On the upside, what can we learn from this critique in order to regain our position? The report states: “The WEF applauded Switzerland for its capacity to innovate, sophisticated business culture, effective public services, excellent infrastructure and well-functioning goods markets.” Well, if you think about where we seem to be headed as a nation (if all goes well and as seemingly intended) many of those attributes seem to be covered. In terms of a capacity to innovate, I think that in times of crises, innovation is often born through necessity. The financial services industry seems to have pulled through the recent crises and is ready for a new era. Perhaps enhanced innovation, coupled with an awareness over the need for increased sustainability, will result in companies looking for ways to do more with less — and for the right reasons. Will 2010 and beyond mark the beginning of a new (and improved) era in financial services here and abroad? I don’t think we have a choice.
