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SALT LAKE CITY — In a world that is not short on opinions, there are voices of pessimism and voices of optimism. Such opinions are then blasted out to the public via powerful channels of rapid communication. However, the reality of most situations usually lies somewhere between extremes. Adding to the confusion lately is the fact that after the worst financial crisis and recession since the 1930s, we're in unfamiliar territory.
People worry about the United States as a world leader, a sluggish economic recovery nationally and a world that just seems to be different than the one they thought they knew. If there's anything we've learned over the last five years, it is that perceived reality can change quickly, very quickly.
New Reality
Descriptions of the new reality following the most recent global financial crisis and recession vary. In 2009, the investment firm PIMCO coined the phrase "new normal" as a period of time following the Great Recession that would be characterized by slow growth in the United States and varying speeds of recovery around the world. Now just this week, prominent market thought leaders Nouriel Roubini and Ian Bremmer talked about the current state of the globe as the "new abnormal" - a period defined by uncertainty and volatility. Whether you go with new normal or new abnormal, there is widespread recognition that current realities are unlike previous times and previous assumptions and perceptions must be challenged.
The fact is, many issues with the potential to cause widespread disruption or even the next economic crisis remain unresolved and will likely remain unresolved for the foreseeable future.
At the heart of these descriptions is recognition of structural issues hanging over the global economy, less global leadership and on-going policy questions. Such issues create elevated levels of uncertainty as well as more volatility in markets. The fact is, many issues with the potential to cause widespread disruption or even the next economic crisis remain unresolved and will likely remain unresolved for the foreseeable future. This sometimes fragile and precarious situation should not be ignored just because all has been relatively quiet over the last several months.
Positive Headlines
Today, the headlines in Utah are quite positive, especially in relative comparisons with the rest of the country and different parts of the world. Even still, many refuse to believe that things are getting better. However the data tell a different story. Whether you're looking at GDP growth or employment growth, the state's economy and business environment is getting better and performing quite well.
Then there are some who believe that the state of Utah is essentially on autopilot and with a few tweaks here and there, positive headlines will continue and all will be well - perpetually. However, challenges such as education and the global economic environment indicate otherwise.
Today, the headlines in Utah are quite positive, especially in relative comparisons with the rest of the country and different parts of the world. Even still, many refuse to believe that things are getting better.
Utah is doing well in many respects. In fact, while conducting research at CBRE, I found Salt Lake was the second best performing office market over the last five years within a set of lower cost/business friendly cities. This speaks to the rapid growth in the area's tech, financial and professional and business services; but so much more needs to be done to maintain quality growth in the state. As such, the bottom line is this: past performance is not a guarantee of future performance.
Complacency
At the start of 2013, I talked about complacency being one of the greatest dangers of the year, particularly for policymakers. The reason why is because it appeared as though many "big problems" would be tame for a short-time, but issues plaguing the global and Utah economies over the last several years were still not fully resolved. Regrettably, over half way through the year, it appears as though complacency has taken hold, particularly on the national level.
Now it is apparent that tax reform won't be enacted anytime too soon. Furthermore, the debt ceiling issue (delayed with the help of higher revenue) will still need to be confronted. Decision makers in Washington D.C. allowed sequestration to go into effect. Not to mention other major issues such as immigration reform are still awaiting a policy response.
Leadership
It's easy for people in well-managed state like Utah to look at Washington and shake their heads. However, without proper leadership it's only a matter of time before major avoidable problems begin to appear here too. As Natalie Gochnour recently wrote in the Deseret News, Utah is a well-managed stated, but cautioned: "Management is critically important, but it's not leadership".
Without proper leadership it's only a matter of time before major avoidable problems begin to appear (in Utah).
In a rapidly changing world, management maintains importance, but leadership, specifically forward-thinking leadership is critically important. Public institutions are typically reactionary by nature, but in today's fast moving world, this can lead to a whole range of problems as leaders in the nation's capital are proving.
It is important to acknowledge the successes of our state and congratulate the sound judgment of Utah's leadership in many areas. However, I add my voice to many others calling for leadership that will more aggressively address today's issues, particularly education, and continue to lay the groundwork for a Utah that is dynamic and ready to lead the future at the cutting edge of new developments. As we now know, things can change quickly and now is not the time to be complacent and take things for granted, especially success.
