ANTenna Blog -- Business & E-Business

Frost & Sullivan calls recession talk a "self-fulfilling prophecy" but CDW IT Monitor says small businesses expect to cut spending even more than do their larger competitors. So, what's really happening out there?

According to a statement by Frost & Sullivan Chairman David Frigstad, "A fear-based climate is [turning] a false perception of doom and gloom into reality, thus driving the economy into recession.” Frigstad claims that fear is out of proportion with the actual condition of the U.S. economy. “There are no economic measurements that support the fact that we are going into a recession. The fundamentals are strong for continued growth and the overall global economy is very healthy,”

Maybe so, but the problems certainly seem real to many small businesses. The CDW IT Monitor is a "bimonthly indicator that tracks the direction and momentum of the U.S. IT marketplace." While the February numbers showed a slight overall increase from 69 - 73, small busineses scored just 63.

Similarly, just 30% of small businesses believe IT budgets will increase in the next six months, compared with 66% to 67% of medium and large businesses. And only 6% of small businesses plan to hire additional IT workers in the next six months, compared to 31% and 38%of medium and large businesses. Some 5% of small businesses plan to cut IT staff in the next six months, compared to 2% in December 2007.

Those numbers make sense when you consider that less than half (49%) of small businesses believe IT investment improves financial performance, down three percentage points from December 2007. By contrast, 80% of medium and 78% of large businesses have confidence in the power of IT.

Are you following all this? Me either. But that kind of mixed signals and confusion seem to be the hallmark of today's economy. There are clearly some troubling economic signs out there, but plenty of bright spots, too. While we need to be prepared for a possible downturn, we don't want to let our insecurity cause one.

Now, how exactly do we do that?