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This claim in “Trouble” shows up in jobs for architects – victims of the construction industry. Boom-and-bust reached its spectacular peak in many industries in 2008/9. Causes are simple – see cyclicality model.
Thanks to Erin Hoffer, current exec participant on the WPI system dynamics course, for this example.
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With worries about world economies falling back again, we could reflect on how we got in this mess, and some questions for Strategy.
Recessions usually start, I hear, in the corporate sector – falls in consumer or public spending then follow those business reversals, rather than the opposite. It can also be shown that an industry can fall into big cycles with no variability at all in underlying demand growth. If this happens in one sector, then both the boom and ...
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Back in 1999 I got booed for saying the dot-com boom was mostly hot air, after which the NASDAQ dropped from 1000 to 200. The Economist now warns of a 2nd bubble,with private equity and big corporates falling over each other to throw cash at anything web-ish. Many of the new ventures will be great, but most will fail, due to poor understanding of whether business models are viable – which needs a sound system-model of the business.
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The Economist reports that the Baltic Capesize index, which measures the cost of chartering huge ocean-going vessels used to transport iron ore and coal, has hit record highs, driven by surging demand for raw materials.
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