Do you think that this is a predictable change in the wake of the boom of the late '90s? In other words, was it too large an expansion then?
It's the balance between sales growth and productivity. When sales were growing by 20 percent, whatever productivity was, the sales level was enough to hire a lot more workers. But now sales overall are only growing by 6 percent or 8 percent or 10 percent. And you've still got productivity and consolidation. It doesn't support an increasing work force. We're not growing in demand worldwide fast enough to support the kind of job growth that we had in the '90s.
We are also in a big hiatus on the infusion of venture capital. It's really back down to '97 and '98 levels. The question is, can it go a lot higher?
Last year was an exception, is that correct? There was a 15 percent increase.
I'm not sure whether it was 15 percent. But it's like you dropped 80 percent and then you bounce back 5 percent or 10 percent. The other way to look at this is asking, "Was 2004 better than 2003?" Yes, except for job growth. And the same holds for 2005. If you ask, "Is either year remotely like 2000?" the answer is no. So it depends on your date of comparison.
You expect 2005 to be continuing somewhat better trends?
For the companies. I'm not sure there will be a lot of employment growth. If you're in, you may be able to do better. If you're not in, it might be hard to get in.
What do you say about the impact of offshore economic trends? In other words, sending work to India and China and the Philippines. Is that playing a role in the job losses?
I think it plays a modest role nationally. There's always been globalisation. Now there's globalisation in services. I would emphasise that what's different now is the spigot of new company creation; it's a lot less forceful than it was [in the late 1990s].
You've got to be inventing something new to do, because the older stuff gets mature. We've stopped doing the creation side, and so the outsourcing is more visible, but I don't think it's accelerated that much.
When you say stop doing the creation side, can you tell me more about what you mean?
It's the venture capital -- the level of the capital funding is down 80 percent or 70 percent. Maybe the last two or three years were an anomaly, but then that would mean that the really high rates of job growth were an anomaly, and we don't know right now.
