May 28, 2013

Crisis? what crisis?

The other day I was listening to the radio while I was jogging. I strongly recommend working hard and then stopping to do some exercise. As Thales said, a long time ago “Mens sana in corpore sano”.
This kind of combination (the order is also important, first intellectual work then the physical one) is good to memorize what you are learning, for instance if you are preparing for one exam or in order to get a boost of creativity if you are thinking in a new entrepreneurial adventure, preparing a study case or as in this case, thinking about a post for your blog!
Anyway, I was listening to an interview of a famous Economist talking about possible solutions to the economical crisis.
We don’t have too many alternatives - the Economist was saying…
1) Devaluation of our currency. BUT, this is difficult if you don’t have your own currency. Apart from that, if you are importation dependent and your debts are in other currencies this will be a good way to increase your inflation - I thought to myself…
2) Salary devaluation. This is also a problem because in order to grow, you need to increase exportations (remember tourism is an exportation but instead of sending products abroad, we bring people!) or increase internal consumption. If you decrease salaries, usually, the last one will decrease.
3) Increase taxes.
What? - I stopped jogging and began a strong argument with someone that was not listening to me! So, we have different options one is impossible (or it will be a disaster) and the two others are the economical metaphor of killing ourselves!
Luckily, there are other ways, Schumpeter’s way! As you know, I am a Touristologist but my cultural background is Economy (I have a PhD in this science). I have always enjoyed going over the theories of Adam Smith, Keynes, Karl March and Friedman.... But the first time I listened to the theories of Schumpeter I said to myself “ I have found and intellectual friend” I talked about Schumpeter and his important ideas in this post. To summarize:
A) Crisis and bubbles are not something you can eliminate. It’s the way capitalism works!
B) In times of crisis you need entrepreneurial activities. Creative destruction. Destroy the old, the corrupt, the inefficient and build something new!
So, currency devaluation, salary devaluation, raising taxes… BUT the best solution, the fairest, the most interesting is Schumpeter’s solution.
We together have to create new international enterprises that make direct competition with big ones. It’s naive to trust big enterprises. They are NOT bad, it’s just that they are enterprises and it is written in their DNA to get maximum profit through monopoly.  They will try to use all their power /influence to get political actions and laws which favor their profits and interests.
Of course, we need big enterprises if we want to play a role in this world, BUT we can create it following bottom-up ideas versus top-down ones. We can create a network of small and medium size enterprises working together as chains of value able to compete and be as efficient as big enterprises.

This is the bottom-up approach, the one that will take us out of this crisis. Everybody is important here, the ones which create these enterprises, the ones which choose to buy their products and services, the ones which ask for real reforms to facilitate this kind of enterprises, good politicians listening to their people and implementing laws that really favor them …
And of course, this movement has to be INTERNATIONAL!
As Thomas Friedman said we are in Globalization 3.0
"Globalization 1.0  1492-1800 when Columbus opened trade between the old world and the new world. It was about countries and muscles.
Globalization 2.0 1800-2000 (interrupted by the Great Depression and World Wars I and II). It was about Multinational companies and industrial revolution (falling transportation and telecommunication cost).
Globalization 3.0 INDIVIDUALS globalizing THROUGH the flat-world platform."
YES! And these individuals must work together, creating, using and managing chain of values.
Are you ready to take your destiny into your own hands, Touristologists?
“The best way to predict the future is to invent it” - Alan Kay, 1971.

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