Hanging Tough
In the New Yorker, James Surowiecki asserts that spending your way out of the recession is the way to go, citing several examples of companies that benefited from this strategy. “But there’s a trade-off: numerous studies have shown that companies that keep spending on acquisition, advertising, and R. & D. during recessions do significantly better than those which make big cuts. In 1927, the economist Roland Vaile found that firms that kept ad spending stable or increased it during the recession of 1921-22 saw their sales hold up significantly better than those which didn’t. A study of advertising during the 1981-82 recession found that sales at firms that increased advertising or held steady grew precipitously in the next three years, compared with only slight increases at firms that had slashed their budgets. And a McKinsey study of the 1990-91 recession found that companies that remained market leaders or became serious challengers during the downturn had increased their acquisition, R. & D., and ad budgets, while companies at the bottom of the pile had reduced them.”

In A Down Economy, Add Value
If you can’t compete in a price race to the bottom, you need to offer something more. Peter Da Vanzo of SEO Book has a few ideas on what you can do to get ahead. “When an economy is booming, companies can risk being sub-optimal. They can get away waste and inefficiency. They can get away with providing less value, because customers aren’t as focused on the bottom line as they are when cash is tight. In a down economy, it is less likely people will be prepared to pay too much for things they don’t really need. So now we’re in a down economy, how will things change?”

What Becomes Of Talent In A Tough Economy?
Online Spin’s Kendall Allen sounds off on how to deal with hiring and nurturing personnel during down times. “If you’ve previously invested in talent , you’ll want to keep the religion of situating for success. That is, getting this valued talent into the right situation for success now and in the future, instead of focusing merely on the immediate task at hand. Directive, compassionate leadership is especially important during periods of great strain.”

To participate in the real economy
On the opposite end of the spectrum, Sean Sakamoto wrote a guest post on No Impact Man about the virtues of frugal living. “I keep reading about how saving is the worst thing for the economy. The New York Times article from which the above quote is taken described Japanese savers as ‘dead weight.’ The underlying assumption is that we must consume more and more to keep the economy growing. People produce things, other people consume those things, and as long as the numbers go up and up, everything is great. A couple of things bother me about this. One is the matter of sustainability. The air we breathe, the water we drink, and the land we farm is already being fouled as a result of economic growth. How long is this supposed to go on before we look for another principle around which to organize our lives?”

The Upside of the Downturn
Kim Kiyosaki calls on everyone to go back to basics in her article on Women Entrepreneur. “There’s an even more important wake-up call for each individual who is willing to address it–the absolute need for true financial education. We can’t allow ourselves to remain so ignorant that we accept a well-crafted, seemingly sincere but greed-based sales pitch as education or financial advice, and then blindly follow that advice.”

IT in a Bad Economy is like Playing the Game Jenga
MakingITClear’s founder Harwell Thrasher gives his advice on balancing IT priorities, using a well-known game as metaphor. “You’ve got to recognize that there is a limit to how much you can safely cut back on mission-critical areas of your organization. Your CEO won’t know what that limit is – you’ll have to determine the limit yourself. But a CEO can definitely understand that there is a limit, just as there’s a limit in other parts of your company. A key aspect of your job as a CIO is to assess those limits, and to make sure that you don’t weaken your organization or your infrastructure too much.”

Did the Web “Kill the Economy”?
In response to its critics, Sarah Jaffe defends the Internet as a medium, reflects on how it was designed, its effects on piracy, and other issues on Global Comment. “The Web gives everyone a platform, but it does not guarantee an audience. It gives you tools for connection, but does not guarantee that people will like you. It widens your reach, extends the likelihood of running into someone that shares your view, but occasionally it feels like shouting in the dark.”