måndag 1 juni 2009

Recession hits the town

When people are told repeatedly that the world is buckling under the weight of a financial crisis, the first line of defense is to save whatever money you have.

That sets a whole new train in motion. We start spending less, saving to left and right.

I've been studying several cities along the coast-line of Southern Finland. The recession isn't yet dramatically visible at the street level.

It seems, we still have business as usual in the service industries, but regardless of a very sunny week-end, people are not visiting restaurants as much as before. Pick-nicks in the nature seems to be a new trend.

Nevertheless, things might change with an increasing number of unemployed. Suddenly, local retailers around the corner are loosing revenues from less frequent customer visits.

They are forced to lay off staff, who in turn are spending less, and in fact are no longer buying products from other stores and vendors.

It becomes a cycle somewhat akin to a self-fulfilling prophecy. We’re told it’s a crisis. We stop spending. Consumers stop spending. Everyone from producer to retailer suffers. And the economic meltdown keeps on melting.

How can we manage a change for increased consumption?

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