Economic gurus call for continued investment even during crisis

An array of Wall Street economic leaders has issued a series of warnings about an economic recession. JPMorgan Chase & Co’s CEO Jamie Dimon said in an interview that excess savings and expenditures caused by COVID-19 pandemic stimulus initiatives will end up running out around the middle of the next year, warning that it will derail and drive the economy into economic recession. Goldman Sachs Group’s CEO David Solomon also shared a dim economic outlook for fewer jobs and lower incomes, projecting that the economy will be faced with strong headwinds down the road.

Growing concerns over an economic downturn spreading across the United States are having a worrying ripple effect on businesses at home and abroad. Dimon predicted that emerging economies, in particular, will have to pay a hefty price due to inflation; high interest rates and foreign exchange rates; and disruptions in supply chains arising due to significant geopolitical shifts including Russia’s invasion into Ukraine. With major economies lowering their expectations for economic growth, experts anticipate some dark clouds over South Korea, which is only expected to grow one percent at most next year. In the face of economic uncertainties, businesses have no option but to put their existential stability above anything else.

However, experts said in a unified voice that it is the right time for businesses to keep investing to survive for the long term. The Dong-A Business Forum 2022 held on Wednesday served as a platform for globally renowned scholars to get together and advise that we should keep marching toward the next level of innovation to brace for the years that will follow a crisis. Professor Vijay Govindarajan at Dartmouth College stressed that now is the time to develop plans to ensure that potential is realized by 2030 for the future, adding that an economic downturn is an optimal time for securing talent and resources for the sake of growth. Discovery Institute’s co-founder George Gilder asked South Korea to develop new industries, including the metaverse field, as the key to “hyper prosperity.”

Innovative businesses, which turned a crisis into opportunities in the past, strongly prove the global scholars right. Many tech firms, including Google and Apple, were created during the dot-com bubble and the financial crisis. Likewise, many South Korean mid-sized businesses rose stronger following the hard times. Even with operational risks rising across the business world, businesses can ensure that preemptive investments work out with a focus on their strengths if they carry out structural reshuffling at the same time.

Indeed, industrial technologies are developing and accelerated while investments are growing in scale. It often takes time to produce tangible results when billions of won are invested in future next-generation industries. If businesses wait until the economy rebounds, they will be sorry. That is why preemptive investments should continue to upgrade core capabilities even in a weakening economy. Also, it is well explained why financial and policy-wise support and less regulation should be accelerated to help businesses keep investing.