Agents of Change

As George W. Bush steps into office, he's faced with significant indicators pointing to a slowing U.S. economy. The stock market, particularly in the technology sector, has taken a beating and shows the battle scars of uncertainty. Dot-com companies are dropping like flies. Gas and energy prices are inching up to uncomfortable levels. Whether the economy succumbs to a recession still is uncertain.

Worse yet, the American public is beginning to have its doubts as well. A 2000 study conducted by Taylor Nelson Sofres Inter-search revealed that the American expectation of prosperity has declined since last year. Only 15% of those surveyed believed that 2001 would be more economically prosperous than 2000, compared to 25% who responded optimistically to the 1999 survey.

A cross-section of 1,000 Americans responded to issues of unemployment, job security and economic prosperity in the last days of 2000. Their answers showed that the stock market's downfall at year-end may have affected their view of the new year. Twenty-three percent believe that 2001 will be a year of economic difficulty, up from last year's figure of 16%.

Where 1999 was the year of unprecedented growth, entrepreneurship and online experimentation, 2001 is shaping up to be the year of tightening the belt, adhering to business plans and fiscal responsibility. Companies are scaling back. Those free meals, on-site massage therapists, company cars and other perks have gone the way of "Those Were the Days, My Friends."

Fuel costs and airline mergers are driving prices of travel to a new high. Managers are reviewing travel budgets and eliminating all but the most essential travel.

Looking at the telecom sector in general and the wireless sector in particular, the warning signs are there as well.

The new year was greeted with pink slips all around. For example, Motorola announced that it would lay off 2,500 employees from its handset manufacturing plant. ADC said it would pink-slip 18% of its systems integration workforce in an effort to boost profitability in its lagging equipment deployment and installation sector. In an effort to trim costs in a competitive market, AT&T Broadband laid off approximately 300 Atlanta-area employees. Nortel Networks' fiber-optic systems division plans to cut about 4,000 full-time jobs in the near-term, but maintain staff numbers at 2000 levels.

However, in spite of these indicators, the wireless industry has reason to take heart. There are two positive outgrowths of this economic trend. First, companies are returning to improving efficiencies, streamlining processes, making intelligent choices, ensuring profitability and strengthening the corporate fiber to be more competitive. That's good for everyone. The employees benefit because companies compensate and promote for performance, they invest in current employees with further training, and they enhance communications between departments. Companies benefit because they are making decisions based on what makes business sense, not because the competitor down the street did it.

Second, and probably most compelling: Because of jittery economic factors striking virtually every industry sector, wireless communications will be the lucky beneficiary.

Where companies might reduce travel, cut budgets and tighten their belts, they will expect their employees to remain as productive, if not more so. Wireless and the Internet are the tools that will permit companies and their employees to produce in the tough times ahead. Budgets may get slashed, but usage will be up to build the profits that are expected.

Only one question remains for wireless carriers: Is your service positioned to become the agent of change in these changing times?