Creative Destruction

As companies worldwide are going through the prevailing financial and economic storm, which is obviously far from having an end in even a remote sight, cash conservation is no doubt the top priority. It is not so much an operating loss as a shortage of cash which kills a company. As such, painful initiatives of retrenchment are already becoming commonplace. World economies are indeed being severely destructed and things will surely get worse before having any chance of getting better.

On the other hand, the destructed corporate landscape may be forming a breeding ground for entrepreneurial creation. As big companies are contracting their workforce like banks are shrinking their balance sheets, some people will start to create jobs for themselves, particularly for those with some saving to spare. Paradoxically, a time of economic recession may also be one of proliferation of entrepreneurial start-ups.

Success of course depends on many critical factors, not least creativity. But not all new businesses have to be necessarily about creating and implementing new ideas. Franchise, for example, is a rather foolproof business model for building on an established brand and creating promising start-ups. But to minimize the risk of failure, one should want to be in a more or less recession-proof kind of business. Given the right location with affordable rental terms for setting the right consumer prices, for instance, franchising an alternative brand with fanciful recipes could be the way to go for starting a new restaurant outlet.

For those with ideas to share with the world but now out of a full time job, there is more time to think and write. There will probably be more new authors who make their debuts published. Like many other retired politicians, purportedly George W. Bush is also composing his own book - apparently in justifying his previous decisions ever made.

For the simple virtue of economic and statistical reality, no doubt many entrepreneurial start-ups will also end up in failure, again destructing economic resources or the ways they were deployed, before new opportunities are found for these idle capital and labour to be put in creative uses again. For hit or miss, entrepreneurial ventures probably are helping to invigorate world economies more than the big companies do, who are mostly busy laying off jobs. Governments the world over should do more to breed and hatch entrepreneurism, rather than simply throwing money to the banks.


Jade Meng said…
The economic storm is the butterfly effect of some people's greed. It is very destructive. We have to wait to see how it can be creative and how it can shape a new international frame.

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