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New Gadgets“This economy” is now a euphemism for the “terrible mess we’re in.” It’s hard to go through a normal business conversation without someone spitting out “this economy” as if it’s a four-letter word. Market gurus can’t agree when it will be over. But whatever the case, some indicators suggest that the technology sector will rally faster than the rest of the economy.
False Perceptions
One can pile argument upon argument as to why the tech sector will not rally soon. Consider the layoffs. Nearly every large technology company performed rounds of layoffs. Why? The answer is grim, but true. Recessions provide a great opportunity for top-grading staff. Although lots of good people were relieved of their jobs, it was part of a cyclical pattern of cutting costs. Consider also the dismal slump in tech sales. This too, has a viable explanation. Tech sales are directly linked to consumer spending. Consumers stopped spending because they were scared. It happens during every economic hiccup. But the sales slump is not a forever slump. It is merely a readjustment-a necessary pause, as in a piece of beautiful music. So, while tech companies cut costs and moaned, there were viable reasons behind the cost-cutting that didn’t signal the demise of the industry.
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