A while back I was interviewed by the Department of Development on the receptive climate of Ohio to businesses. I believe the Department of Development has added much to our state and entrepreneurial spirit in this region. However, there is an area that we did not cover in the interview that I would like to emphasize:
While the Ohio business climate (and most of the US for that matter) is fertile for business investments, too few businesses are really investing. Before my counterparts running businesses decide to unfriend, unlink and generally disavow me, let me explain. Over the last 5 years our economy in this region, nation and in much of the world has gone through significant changes while going into and out of the recession. These changes have pushed many business leaders to reevaluate the value proposition for our business investments (a good thing). Unfortunately, many otherwise smart business people have what psychologists call apprehensive expectation (a bad thing). The actual definition of this defies logic, but the idea is that we learn unhealthy, defensive behaviors--behaviors like hoarding the largest cash reserve vs. GDP in our nation’s history. Take even the Federal Reserve who thought they had learned the correct fiscal policy lessons after the 1920–21 recession. Believing it understood deflation and liquidation dynamics, the Fed tightened the money supply and helped the Depression to spiral out of control.
No, I am not accusing American businesses of pushing us into a depression, only to consider the costs of learning the wrong lessons. At a minimum this may mean losing opportunities for their businesses and stakeholders, but may also lead to a generation of misguided business leaders who believe that underinvesting is the best way to protect their businesses. Let us all consider this a threat to our businesses and communities in this area, region, and nation. We must prepare for rainy days, WHILE we invest for the future.
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