B.C. After the Olympics

There is going to be an economy in BC after the Olympics, and it may be a rough one in the aftermath of the recession. It may be difficult for some to believe but there is going to be a BC economy in 2010 once the Olympic circus has left town in March. But with all the O-noise, it's difficult for many businesses to plan for the remaining three-quarters of the year. No one knows what the after effects of the Olympics are going to be.

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There is going to be an economy in BC after the Olympics, and it may be a rough one in the aftermath of the recession.

It may be difficult for some to believe but there is going to be a BC economy in 2010 once the Olympic circus has left town in March.

But with all the O-noise, it’s difficult for many businesses to plan for the remaining three-quarters of the year. No one knows what the after effects of the Olympics are going to be.

I submit that for most businesses, the after-effects are going to be nil, other than a build up of tasks that will probably be left undone as the Games takes over the city.

So to help with this kind of planning, here are some thoughts.

1. The economy is clearly picking up. Not only do we all feel it, but statistics will likely prove it if you can comb the Olympics blip out of the numbers when they come out. That’s a nice up side, but this recovery does have a considerable difference when compared to this time pre-recession. Grand strategic schemes and adventures are out;  ROI-producing tactics are in. We’re getting enthusiastic again, but we’re much more hard-headed and practical this time around. Instead of dreaming up something and trying to sell someone on it, more of us are listening to our potential customers and trying to meet their needs.

2. This may seem contrary, but at the same time, product and service innovation is coming back in style. We have recognized that the old ways didn’t work all that well, so we have to find new ways, form new views, and try new techniques. But again this has a twist. Instead of betting the farm on some innovation, we’re adding it to the mix, being more careful and incremental about it. There’s more emphasis today on “practical” innovation — ie. something that will have a relatively  immediate impact — than on innovation that will take years to pay off.

3. This is going to be the year of the the price hike, not just from companies but from governments and agencies as well. A lot of businesses were hurt in the recession, and are going to have to make up those losses — while at the same time operating with less costs and people. We were lucky in a sense in that interest rates were near zero and inflation was almost ziltch, but that was just temporary. They’re both going to go up this year, which will force companies to raise their prices to make up their losses as well as keep pace with rising costs. Lean only gets you so far.

4. Governments are going to make massive intrusions into the marketplace, not as regulators but by sucking away consumer dollars through increased taxes, user fees, and other creative ways of leveraging money out of our pockets. All governments, provincial and federal, are broke and running humongous deficits (even mighty Alberta is in the red), and have to install some fiscal prudence.

According to David Dodge, the former central bank chief, that’s not going to be painless. Among things Dodge sees coming are increases in the GST — or more precisely a re-institution of original GST rates (which will make our new HST hurt even more), carbon taxes (which in BC will mean “more” carbon taxes), and the instituting of user fees for public services that we generally take for granted.

On a provincial level, look for road usage fees, bridge usage fees, education fees, and fees on just about any government service. They may be small, but together they will have a big impact on consumers’ cost of living, which means they’ll cut back in other areas.