By Terry Mock
Follow Terry on Twitter: @SustainLandDev
January 31, 2008
The cover on Newsweek magazine this week is titled “The Road to Recession.” This title signals what many land developers have known for some time – an unavoidable recession has already started.
The economic news coming out of the annual World Economic Forum, which has just concluded in Davos, Switzerland, is not good.
Nouriel Roubini, an influential professor of economics and international business, is quoted in the Times, U.K. as saying that it is not whether there will be a soft landing or a hard landing in the US, but rather how hard will the landing be. Further, he contends that the recession is going to be deeper, will last at least four quarters and will be severe
“We know booms and busts are aspects of capitalism and have been so historically. Many of them have been driven by a technological innovation–whether it was the railroad or the Internet–and they may create bubbles, fraud and eventual losses. But they are also driven by real innovation,” he is quoted to say in the article.
“This latest crisis we see today differs from such historical examples in two important elements. First, with housing there was no technological revolution of any sort. We still build homes basically the same way we did 50 years ago. The innovation in this instance was financial…,” he concluded.
So, if financial innovation has led us into the latest bust phase of the business cycle, can another type of innovation lead us out? According to Klaus Schwab, founder of the World Economic Forum, “Collaborative innovation is needed to unlock the future as the world is facing a variety of challenges”.
This need for collaborative innovation is also becoming acutely obvious in the land development industry, as stated by SLDI President Tony Wernke in his latest SLDT article Seeing Through the Cycles.
“Individually, we are at the mercy of the rest of the world. Together, we can achieve the necessary vision of a truly sustainable future that embodies a triple-bottom-line perspective,” Wernke stated.
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