POWER GIZMOS TO POWER BUSINESS
A new generation of electronic executive power tools is transforming the very nature of work. With handheld organizers, laptops, and Internet phones, the workplace is becoming virtual--anywhere, anytime. Work is becoming seamless as it moves between home, office, and plane as well as endless as it rolls through a 24-hour day. People realize these cool tools are changing their individual work lives. What they don't see is that these great new high-tech products are also changing the shape of the U.S. business cycle.
The U.S. economy is being driven today by an investment-led expansion. Information technology has replaced traditional cyclical industries, such as autos and housing, as the economy's driving force. But an expansion based on technology rides a new-product cycle, not an inflation cycle. Amid intense global competition and little pricing power, companies rely on such new blockbusters as Motorola's StarTAC cell phone or 3Com's PalmPilot organizer for fat profit margins. Without them, those margins melt away. The next downturn in the business cycle could easily come from a pause in new-product development or from a number of big new products failing in the marketplace. That almost happened this summer, when the computer sector swooned and only pulled out after something new--PCs priced under $1,000--came on the market and were instant hits (page 111).
So know that in this Christmas buying season, those great new high-tech products not only will increase your personal productivity but also are the key to a continued investment-led expansion. That these gizmos are also fun is a bonus.