A recession is defined as a decline in GDP for two or more consecutive quarters. It is a period of general economic decline characterised by rising unemployment, lower reported company profit and a drop in household spending. The current global recession is said to have begun with a crisis in the US housing industry at the end of 2007. The recession spread quickly, plunging an integrated global economy into possibly the worst financial crisis since the Great Depression in the 1930’s.
Many sectors have been hit hard by this recession including the construction, financial and automotive industries. In-fact industries across the globe in various sectors have experienced significant declines in demand as a result of the recession. Worldwide, bankruptcy, poverty, joblessness and crime are on the rise however for some the global economic downturn tells another story.
Certain industries, it seems, are recession resistant. Despite the general decline being experienced by enterprises in all sectors some companies are thriving in these trying economic times. Two such industries include open source software and Internet marketing.
The use and development of open source software seems to be coming into its own in recent times. The recession has caused many corporations to re-consider their software options giving preference to more cost effective solutions. Companies such as RedHat, SugarCRM and Vyatta continue to grow whilst the technology sector in general is declining.
With Linux based software gaining popularity even Microsoft is including open source components in their software packages. Microsoft spokesman Sam Ramji says "The bulk of the opportunity is open source applications on Windows, but these things are all coming together. We are really bullish on being a platform for some of this innovation as customers want more functionality out of their hardware and software. We are becoming a conduit for other technologies."
Internet marketing is another industry in-which growth figures seem to climb steadily. Many organisations faced with budget cuts say they will continue and even increase spend on Internet marketing. This is not surprising, in light of the results of a 2007 survey in-which 81% of marketers surveyed say that their social media spending will meet or exceed their traditional advertising spending within the next 5 years.
Faced with tight budgets marketers are pressed to look for the best value and employ innovative marketing techniques such as those offered with Internet marketing packages. Search engine optimisation, e-mail marketing, affiliate marketing, pay-per-click and social media optimisation are measurable, efficient and cost-effective.
It stands to reason that industries which serve basic needs such as food, education, healthcare and energy will withstand recessionary pressure due to the low income elasticity of demand. Those businesses which offer great value on vital products and services will appeal to price sensitive buyers. Likewise, in the B2B arena enterprises which cater their client’s basic operational needs in a cost effective manner will thrive in the cash-strapped recessionary climate.
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