Growth refers to a positive change in size, often over a period of time. Growth can occur as a stage of maturation or a process toward fulfillment. It can also perpetuate endlessly, for example, as detailed by some theories of the ultimate state of the universe.
The quantity can be:
- Physical (eg: growth in height, growth in an amount of money)
- Abstract (eg: a system becoming more complex, an organism becoming more mature)
GDPNow: model forecast for real GDP growth (seasonally adjusted rate). In the first quarter of 2015, has been downgraded once again to… 0.0% on April 1st, down from 2.3% on February 13, 2015.
The Atlanta Fed
“When you stop growing you start dying”
William S. Burroughs
The idea of growth seems so simple that we take it for granted. Knowledge, experience, bank accounts, and even waistline are personal and sometimes seem beyond our control. Study, involvement, savings and exercise can, in many instances, allow us to have a firmer grip on growth.
Unfortunately, when it comes to the growth of an economy we are helpless to shape its future. Most people are caught in the belief that “a body in motion tends to stay in motion” or more simply put GDP growth can perpetuate endlessly.
The first Friday of every month is jobs Friday. The Bureau of Labor Statistics (my favorite fantasy next to Frozen) presents both the number of new jobs created and the unemployment figures.
Much has been written and discussed about both. We’ll have a few comments in Our Week in Review analysis. However, the Wednesday before is always the ADP (Automatic Data Processing) jobs number. Since ADP’s primary mode of business is human resource, payroll, tax and benefits administration it would only seem logical that they would have a more accurate, up close and personal, look at the increase or decrease in the jobs market. Until most recently, however, nothing could be further from the truth. The inaccuracies and subsequent mockery have forced ADP to reevaluate their methods to bring a closer relationship with the BLS numbers. One could say, over the past 18 months, mission accomplished which is why the most recent manufacturing jobs, a number of negative 1,000, should be taken seriously.
When the slippery slope of non-growth is entered into it is very difficult to reverse. Especially when it has become a worldwide phenomenon.
China, which was once proclaiming double digit growth, is now questioned about the legitimacy of its single digit numbers. Europe continues to slide with a single digit but with a negative sign. Latin and South America have had to suspend the use of the word growth from their vocabulary. The United States of America, through the BLS, simply reconfigures numbers to stay in the positive. You may be out of work but you’re not unemployed.
Unfortunately, reality and economics soon, like cream, rises to the top but not before a little job humor.
Growth for any country, excluding its military industrial complex, must create, encourage and foster the sales cycle-sales, production, employment, and wages.
The same is true of any corporation. Fortunately or unfortunately, when a company reaches a point that its product is simply a commodity, or technology has passed it by, the rules of the game change. Competition forces the company to cut margins, invest in more research and development and try, through advertising, to recreate the company’s once dominant position.
Countries and corporations are similar in their response to commoditization and competition. When either fails to respond and grow, then Burroughs’s comment becomes all to true.
However, most employees, citizens, countries and companies always believe it can’t happen to them.
Perhaps an indication of the road America is on would best be understood by looking at one of America’s legacy companies, Eastman Kodak. (Full disclosure, I was raised in the shadow of the big yellow box).
A snapshot view of George Eastman’s company which he founded in 1888:
- Known for its photographic film products
- 1907: 5,000 employees
- 1976: a 90% share of photographic film sales worldwide, 145,000 employees
- Tag line: A Kodak moment
- An EK engineer presents the digital concept and is rebuffed with “We are a film company son”
- 2010: 18,000 employees
- 2012: Files for chapter 11 bankruptcy protection, the stock delisted from the New York Stock Exchange.
- Sells its patents for 1-1/2 billion dollars to Apple, Google, Facebook, Amazon and Microsoft.
- 2015: 7,500 employees
Each company and each country have various idiosyncrasies that are indigenous to them and them alone.
But they all share one common denominator.
GROW OR DIE
ARE WE WITNESSING THE DEATH THROWS OF A ONCE GREAT COUNTRY?
NO ONE THINKS SO…
BUT NEITHER DID ANYONE AT KODAK…
ONLY TIME WILL TELL.