The Great Depression

Posted on January 30, 2003

Is anybody else out there as tired of the Great IT Depression as I am?

For those of you outside the computer field, this may feel like a recession. To those of us in the tech biz, I’ll be frank — it’s not a recession, it’s a depression. A real, honest-to-god, holy-schnikies depression like the one you read about in American History back in 8th grade.

Nobody’s spending. Nobody’s hiring. Nobody’s innovating. Everywhere you look people are trimming back, holding in, putting off. The big companies — IBM, Microsoft, Oracle? They’re too busy scrapping it out for what Fortune 500 bucks are available to do any real forward thinking. The little companies? Folks, the little companies are dying. This is a BIG DEAL because it’s little, entrepreneurial companies that have provided America with the impetus that’s driven our economy for 20 years. Even some companies that are Big Companies today — say, HP — started out as little companies, way back when. Where will the next HP come from? Who will innovate? Who will lead?

It’s times like these, when things are tight and danger seems to loom around every corner, that demand innovation most. What seems like the safe choice — pulling back, digging in, hanging on — is, in many cases, the wrong choice. Hanging on to a share of a dying business is a strategy guaranteed to fail. But since it’s familiar, it seems safe — safer than the alternative, the leap of faith — so people do it, and ride headfirst down the death spiral.

So what do you do when nobody is willing to take that leap of faith? When an entire industry has its confidence shaken so much that any risk is too much? Because that’s where we are, folks. We are in the hole without a ladder. And it’s starting to feel like it’s not dirt at the bottom of that hole, but quicksand.

Where will the kick-start come from? Not from the government, that’s for sure. The White House is too busy hunting down the dividend tax to notice that most Americans don’t receive more than $50/year in dividends. Hell, most Americans don’t receive anything in dividends! Why not do something that will get money circulating again — something like a one-year payroll tax holiday (thanks to Robert Reich for the idea, btw)? Why not? Who knows? And don’t expect help from Congress either — they’re too busy cheering their guts out for war to notice the sorry state we’re in.

So who’s going to lead this business into the light? I wish I knew. Somewhere out there, in some garage or dorm room, there’s someone hacking away on an idea so good that nobody will be able to resist it — so good that it will get things moving again. In the 70s, it was Woz and his homebrew Apple computer; in the 90s, it was Tim Berners-Lee and his newfangled World Wide Web doohickey. Will we have to wait until 2010 or beyond for the Next Big Thing to bail us out? I sure hope not. But right now — at the center of the Tech Depression, in the belly of the beast — it’s just too hard to say.