Historically, U.S. recessions or periods of economic struggle have been followed either by innovation in the economy or by war. Both help to stimulate manufacturing and decrease unemployment, helping to refresh the economy.
K-State faculty and students estimate that the economy will continue to recover from the recent recession for about one to five years and said now is the best time to start a business.
“Hopefully we are to going see a focus on entrepreneurship. Hopefully we are going see a focus on innovation,” said Jeffrey Hornsby, director of the Center for the Advancement of Entrepreneurship and professor of management.
A recession is the right time for any sort of startup, Hornsby said. He said that business giants such as Apple, Microsoft and Hewlett-Packard were launched during periods of economic struggle.
According to Hornsby, most of the large companies, especially the ones related to technology, came out of recessionary times due to the growth of entrepreneurship.
The current recession coincides with several international conflicts that can determine the direction the U.S. government will move in the future. Civil war in Syria, Iran’s nuclear threat and overall instability in the Middle East are just some global incidents influencing the price of fuel.
“These issues need to be solved,” Hornsby said. “That could be very dangerous.”
Meanwhile, he said, the unpredictable situation with fossil fuels will push the U.S. to appeal to green and environmentally friendly technologies. Hornsby said he thinks people should move away from fossil fuels and invest more in solar and hydrogen technologies.
“I think you will see focus on sustainability, green businesses, social businesses and enterprises that support all that,” he said.
To start using green technologies, though, government endorsement is needed, said Daniel Kuester, director of undergraduate studies in economics. According to Kuester, a green revolution in the economy is possible only if the government decides to increase expenditure for those purposes.
“That is going to depend very much on the political climate of the country,” Kuester said.
According to Kuester, the segment of the economy that will not face trouble in the future is any sphere of business dealing with the aging population.
Healthcare for this social group is going to be an enterprise that has room for success, as the majority of the growing aging population has disposable income, he said.
“No matter what happens with the general economy in a larger sense,” Kuester said. “That’s a promising sector.”
Kuester also said he anticipated great demand for skilled workers and education, and that the more academic achievements a person has, the more likely the person will remain employed.
“Just getting an education, I think, is a real premium for students and for everyone,” he said.
Another segment of economy that is expected to keep growing is information technology.
Steven Coen, senior in finance and entrepreneurship, said people who understand how to derive a profit from free flow of information the Internet provides can be very successful in the future.
“If you can find some way to catch the word of mouth and everyone’s opinion about your products, then you can create more or less a perfect product for your targeted market,” Coen said.
Going beyond theory, Coen started his own business. Using his skill to find demanded information from sellers and appropriate customers for them, Coen connects people who want to sell certain books and people who are looking for the same books. He described his business, named MyRiBiT as “selling pockets of information.”
Kuester said he also sees potential in the technology industry. This area has already experienced tremendous growth in the last decade, he said. However, Kuester also said that there is still potential in the sphere of information technology.
“I think a lot of these things are beyond our imagination,” he said.
Hornsby, Kuester and Coen all agreed that a recession is not a time to wait, but a time to do.
“It’s a good time to start business,” Coen said “Yes, the unemployment is little high and market is not great. But it doesn’t mean anything. Right now you can get a loan for the cheapest. The interest rate is so low right now. Banks can lend money for almost nothing.”