So, the stock market has tanked, may tank further, and the gurus (not that they’re always right by any means) seem to feel that the US is looking at a two-year recession, if not longer. Feeling a bit philosophical, I started wondering how much the financial meltdown will impact infotech.
The net effect seems blurry at this time, partly because companies put money into IT if they perceive that it will improve productivity, and you can argue that improving productivity is just as important in lean times as in prosperous ones. When your bottom line is being pummeled, you look for ways to economize; and although early implementations of PC technology did not necessarily bring productivity gains (my 1995 book, Exploding the Computer Myth, was all about that thesis), many companies have by now figured out how to use IT to run leaner, meaner, and smarter. (In some cases, just leaner and meaner.)
My guess would be that this downturn will be very different for the information technology industry than the dot-com bubble’s burst of a few years ago. A lot of companies will downsize, some right out of existence (if our elected officials can stop themselves from shoveling good money after bad and subsidizing criminal incompetence). But I’m somehow optimistic that many more firms will continue investing in technology that makes sense – such as virtualization. If we don’t keep innovating, the new innovators around the world will eat our lunch. If the massive economic collapse that we’re seeing now has the effect of reminding us how vulnerable we are, it may even spur innovation and lead to creative new applications of technology. I’d be curious to know what you think the big growth areas are going to be for IT in a time of economic contraction.
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