Well, I’m not happy to have been prescient in this case, but…
Here’s what I wrote in this blog in January 2008, in response to a blog post touting Web 2.0 as an antidote for economic recession:
A stock market crash is going to sink Web 2.0 ships, just as surely as it sinks others. And you gotta be kidding if you think the Read/Write web could mitigate, no less reverse it.
An outgoing tide of prosperity might leave a lot of us extra time to blog about it (e.g., from your iPhone on a soup kitchen line). For a while. Until harsh cash flow considerations through the prism of Maslow’s hierarchy force us to hock our iPhones and cancel our broadband. Or our electricity gets cut off.
Increased productivity and communication due to the rollout and proliferation of electricity, the telephone and the radio in the 1920’s did nothing to prevent or mitigate the Great Depression of 1929. Small businesses then suffered and went out of business, just as small Web 2.0-enabled businesses in a 21st century depression would.
I hope a recession or depression doesn’t come. But “it can’t happen again” is wrong. And some cool new twists to the internets ain’t gonna stay the invisible hand of Adam Smith…
Speaking of smack-downs by the invisible hand, I know of one massive Enterprise 2.0 project which is “on hold” as a very direct result of the economic crisis–and there are no doubt dozens more.
Which is not quite as bad, in relative terms, as the guy in the pub last night who told me about the large and final payment for work done for Lehman Brothers–that he’ll never see.
Last weekend’s edition of the International Herald Tribune has a related article, “A Fog Descends on Silicon Valley: Technology Firms are Discovering that they won’t be Spared by the Spreading Economic Crisis” (that’s the print edition headline). Here’s how the article concludes:
But not everyone is confident that the Valley is doing enough to adjust to the fast-changing economic situation. Jonathan Abrams, who founded the social networking pioneer Friendster, now runs a party-planning start-up called Socializr, which has only six employees and is prepared to “hunker down if things go bad,” Abrams said.
Abrams is unimpressed with the Valley’s readiness in general, saying numerous uninspired, copy-cat entrepreneurs are obsessed with the internal gossip and minutiae of the industry.
“The economy is tanking and people are arguing about whether they should go to Demo or TechCrunch,” two technology conferences that coincided last month, Abrams said. “Few companies sound like they are breaking new ground. It’s like, ‘Here is Twitter for dogs.’ And people still think they are going to get rich by being a blogger.”
“It seems to me like the industry is still in denial,” he said.
The wisdom of crowds right now in the U.S. is to hunker down and slash consumption. From an article in this morning’s IHT:
Cowed by the financial crisis, U.S. consumers are pulling back on their spending, all but guaranteeing that the economic situation will get worse before it gets better.
In response to the falling value of their homes and high gasoline prices, Americans have become more frugal all year. But in recent weeks, as the financial crisis reverberated from Wall Street to Washington and beyond, consumers appear to have cut back sharply, a development with implications not only in the United States but for exporters in Asia and elsewhere.
