When an internationally known economist bets his career on social media, you pay attention.
I first heard the Michael Mandel speak in February 2009 when, as he put it, “the economy was stone dead.” At the time he was chief economist for BusinessWeek and had authored more than 50 of the magazine's cover stories. What I liked about him then – and what I enjoyed again last week when I heard him speak for a second time – was his rational, resilient optimism.
Back in 2009, Mandel showed reams of data giving a historical perspective on how bad the current recession was (answer: very bad), how we got here (answer: greed and deregulation), and how we can recover (answer: innovation). Mandel is a big fan of innovation as the engine that drives the US economy. He's consistently argued that the only way to dig-out from the current recession is to find ways to generate growth through innovation. As he put it, saving your way out of a recession “takes forever”. Over the past decade, he contends, too much innovation has failed to mature and become commercially disruptive.
Last week, Mandel pointed out that the current recession is so deep any recovery will likely be slow. However, describing his job as “divining the shape of economic booms from weak signals”, he sees early optimistic signs in a few market sectors, chief among them being media and communications. He's especially bullish about the online sector and its disruptive effect on everything from journalism to advertising, although he sees massive changes ahead for the entertainment industry, too. He pointed out that in 2010, about $62 billion will be spent in online advertising (about 15% of overall advertising spend), and this will climb to $146 billion by 2020.
None of these insights are especially original but Mandel has, as he put it, bet on his own predictions: Last year he left BusinessWeek and founded his own online venture, Visible Economy. He's pretty blunt in his opinion of old media – while many argue that the business model for journalism is in question, he contends the problem is more fundamental. For Mandel, conventional journalism is broken, and no longer delivers what people want, when and how they want it.
He could be right.