Uh-oh.  The slow recovery we’re currently ‘enjoying’ (using that term loosely) may be something we have to get used to.

In the October 22 issue of Business Week, one article discusses economic growth, the 150+ years we’ve enjoyed of it (save a few down periods), and that it’s something we may never see again.  That’s because on October 8, ‘the International Monetary Fund lowered its global growth forecast for 2013, from 3.9 percent to 3.6 percent.  The fund also warned of an “alarmingly high” chance that growth would slip below 2% next year’ (page 19).

The article sites a paper written by Robert Gordon (Professor of Economics at Northwestern University) recently published by the National Bureau of Economic Research.  Mr. Gordon states that over history, prolonged economic growth typically comes on the heels of seismic discovery in science and technology.  For example, prior to the steam engine societies were pretty stagnant.  Once the trains got going and this technology was put to use in factories, all sorts of talent movement, innovation, distribution expansion and production capabilities inspired all sorts of new products and services never before imagined.  Which ignited extraordinary growth for an extended period.  With more money and more people came more growth.

More recently the computing boom birthed all sorts of new products, but arguably in that segment alone.  Rather than leveraging computers to create all sorts of game-changing new products, Mr. Gordon feels they only increased production efficiencies of the products and services we already use.  (While it’s easy to take umbrage with this POV as many new inventions have certainly been birthed – just not seismically different products.)

He says that by the year 2100, our growth rate may go back to where it started pre-steam engine – 0.2%, and that the IMF downgrade may point out that these are actually the good times!  While Mr. Gordon makes Eeyore seem like the life of the party, let’s assume there’s some truth to his grim forecast.  How will that affect business?

Typically, slower growth means corporate consolidation, and those brave souls boasting better mousetraps will either be spit out or gobbled up in order to preserve market share dominance of the largest players.  Companies will be slow to launch new products because the market is asleep, which will curtail innovation and force companies to drive up profit by eliminating cost.  R&D will get slashed.  Same for advertising budgets.

Following this logic further, two kinds of players within each industry would likely emerge:  the category leaders and the price leaders.  There will be no in-between.  The mature market scenario.  Arguably, we see this today.  And given the workload required of today’s workforce, further improvements in productivity can only go so far.  Unless seismic innovation ushers in a new era of sustained growth soon, we may have to deal with this for a very long time.

If this envisioned future becomes reality (or some throttled form thereof), it’ll be incumbent on leading companies to be seen in an invaluable light.  So how do you stand apart?   This is where category relevancy becomes crucial as customers and partners still have choices.  With fewer players out there, it’s likely that awareness of the remaining companies will be strong.  To assure them, they need to know the expertise behind the products and services you sell – not just that you sell products and services.

I hope the future portended by Professor Gordon is inaccurate and that the full potential of computing is just getting started.  This economic period of Eeyore is certainly stubborn, and global growth will take time to recapture its inner-Tigger.  But I hope it comes pouncing along soon.