What happens during a recession? Well, stock markets go down, interest rates collapse, jobs are cut, inflation falls and governments run around like headless chickens blaming everyone else but themselves. But this recession is unique; it’s the first recession where so much of the economy is dependent upon the Internet.
It’s not just commercial web sites that have a problem, the health service, for instance swaps information using online technology, even the banking system requires the Internet for it to survive. So, when the history books are written they will no doubt make the point that the Internet was a crucial factor in this recession. Whether they will decide that the Internet had a positive or a negative effect remains to be seen.
However, the Internet is having a further effect on this recession; something we didn’t have in previous recessions. This time negative news about the recession can spread around the world within seconds. News about job losses announced in one corner of the UK may have only previously made it to the early evening news watched by a few million. Now, within moments of the announcement tens of millions of people can know about the tiniest fragment of recession news. Indeed, there are special web sites and blogs updating us on every aspect of the recession and major sites like the BBC have mashups showing us where the impact of the recession is greatest.
Add to this the fact that social networks allow us to hear about friends who have lost their jobs or who are worried about their jobs and the whole Internet can make us feel like we are in a dreadful situation. We are, of course, in troubled economic times, but the Internet could be making us feel it is worse than it actually is. A survey on BBC Radio Five Live that has been running all day suggests that one in three people in the UK think the recession is going to get worse, whereas the remainder think it isn’t going to get better…!
You will, of course, find people saying things like “we are on the start of the upturn” or “things in my sector are starting to look better”. But then as soon as you hear those things, before you know it, there’s a tide of Tweets on Twitter saying “worse is to come”.
Here’s what’s happening – social acceptance theory in action. We don’t like to say things that are too out of line with the things other people are saying as we subconsciously fear social isolation. So, we always tend to agree with people in order to gain social acceptance. When the media coverage tells us there is a recession and other people start saying how bad it is, we don’t like saying things like “ah, it’s all tosh, there’s no such thing as a recession”. So, the Five Live survey is unsurprising – most people are agreeing with each other because if they didn’t, well who knows what would happen…!
So, what can you do in your business about this? You have to do something which most business people have drummed out of them at business school…! You have to rely on your gut instincts, your emotions. If your instant, gut instinct is that your sector, or your niche is going to do well regardless of all the doom and gloom surrounding you, then rely on that feeling rather than the negative chit-chat. Equally, if your instinct is that your business is facing dire straits, then do something about it.
Plenty of research now suggests that gut instincts are invariably right. So rely on them in a recession, rather than the negativity swirling around the ether of the Internet.