In the fall of 2008 business almost seemed to stop.  Companies cancelled orders, quit hiring, and stopped paying suppliers.  Stocks fell, consumers quickly cut their spending, and there was substantial fear the global economy was facing another great depression. 

While the causes and responses to the recession are complex, the speed which companies and consumers reacted and changed the way they behaved is more easily explained.  News of the recession spread much more quickly than in past recessions, and businesses and consumers reacted more quickly. 

A great example of increased information velocity is the "RIP: Good Times" presentation from the VC firm Sequoia.  The presentation was given to Sequoia's portfolio companies in early October of 2008 and was, in theory, confidential.  But within a few days, the presentation and its gloomy forecasts were widely distributed on the Internet. 

Increased information velocity didn't just get the news out more quickly, but also allowed companies to react faster.  Lean manufacturing, just in time supply chain and real-time inventory systems have increased corporate information velocity, making companies more agile. 

We believe increased information velocity and business agility means the economic recovery, already well underway, will happen faster and be stronger than most expect. 


Link to original post