The 2 Speed Economy - Big versus Small Business

The 2 Speed Economy is a term used to describe the differences in economic growth between northern and southern Europe.

It also seems to be a good descriptor for what is happening in the U.S. economy. 

Large corporate profits are quickly recovering.  Q2 profits for the S&P 500 were up 29% and profit margins reached near record levels.  Despite the sputtering U.S. economic recovery, analysts are forecasting continued large company sales and profit growth over the coming year.

Large companies are doing well because of their exposure to stronger international markets and better access to credit and government stimulus spending.  They've also improved productivity through costs cutting, reductions in staff and automation.

Small businesses are not doing nearly as well.  Although there are signs that the small business economy is improving, times are still tough for most small businesses.  This is a key reason employment growth is so weak and many feel the economy is still in a recession.

Earlier this year we suggested we would see a trickle down economic recovery, with large firms leading and small businesses lagging. 

Large firms are clearly recovering and we still think the trickle down economy will positively impact small businesses over the next year. 

But we also think large corporations will continue to out perform small businesses, leading to a 2 speed economy.  If the 2 speed economy persists, this shift will have profound impacts on business and society.

Comments

[nike dunks sb]

We work with small businesses who aren't seeing recovery in the economy because consumers aren't buying yet. It's a big deal to them and they are truly suffering.

[supra skytop]

i thought this was funny. Natalie Dee's comic shows what happens between egg friends when one them becomes a chicken. As Serious Eats put it.

[kelly]

We work with small businesses who aren't seeing recovery in the economy because consumers aren't buying yet. It's a big deal to them and they are truly suffering.

[air force 1s]

Is it OK if I go a bit off topic? I'm trying to view your post on my Macbook

[air force 1s]

Is it OK if I go a bit off topic? I'm trying to view your post on my Macbook

[dunks]

I'm trying to view your post on my Macbook but it doesn't display properly, do you have any suggestions?

[dunks]

I'm trying to view your post on my Macbook but it doesn't display properly, do you have any suggestions?

[new balance]

If you wish to succeed , you should use persistence as your good friend , experience as your reference , prudence as your brother and hope as your sentry.