CAN SERVICES CHANGE AN EVERCHANGING ECONOMY
Over the past few years, the banking and financial service industries have been scrutinized unilaterally in the public media. Innumerable documentaries have been filmed and articles written lambasting corrupt financiers. The Madoffs and Stanfords of the financial service industry, corrupt politicians reaping huge profits in the U.S. home mortgage fiascos, and the fall of such industry giants as Lehmann Brothers have not only affected the domestic economy, but with the continual advance of open markets, these crises have had a global impact on the world economy. In spite of these egregious and systemic failures in the financial services industry, the author of this article holds that the world economy can indeed be set right by the further development of global financial services and is reliant upon this industry to pull the world away from recession. This is an important perspective, for if it is true, a great deal is riding on the proper future oversight of the industry.
The author holds that there can be no scenario for recovery which excludes the financial services industry and the banking industry in particular. Alternatives to the current system of world banking would not be practical, as no political body would have the fortitude to suggest such change, and the markets and the people using them would lack the patience to await such development. Another point the author suggests is that service industries diminish the separation layers between business and customer. As such, there is little room for companies to fall from favor in the eyes of consumers. Poor publicity, such as criminal activity and highly publicized law suits, become a direct threat to the existence of any service industry, especially financial services. Speculating that pursuant to the latest era of global recession, households will tend to pay off debt instead and borrowing, the author contends that investment banks will have to sit on investment monies, making it harder for them to earn the cost of capital.
The author creates a simple explanation involving the global financial services industry as the integral tool in global economic recovery. This theory is of importance to managers of many industries beyond financial services, however. If it holds true that global consumers become more intrinsically involved in the furtherance of global financial service industries; and therefore hold these industries to a higher level of propriety than in the past, advertising and marketing may be forced to share some of the budget pie with governance programs. Coupled with reduced trust from consumers on the heels of significant scandals, image building and maintenance may become paramount for service industries in general.
Source:
Alexandru, D. (2012). Can Services Change an Ever Changing Economy. Global Conference on Business and Finance Proceedings, 7(2), 526-531.
It seems that authors believe in services will help a crisis recover. To me, the interesting point is authors mention about the Keynes' system to "decrease booming growth". Another point is the economy has its cyclical growth and we are experiencing the recession that happened in the past but we still can not fully understanding its operation. Not liked the authors, I think that the global economy will be recovered because it develops in cycling, go up and down. But, this process will need acts from others patterns of the economy such as manufacturing industry, not just the financial services. Because I do believe that the financial services is the reason for the economic recession that global economy is facing.
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