Tech execs, economists concerned for U.S., Calif

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Tech execs, economists concerned for U.S., Calif Updated 9:22 PM ET May 4, 2001 By Andrea Orr PORTOLA VALLEY, Calif.(Reuters) - On a day that a rally in U.S. stock markets lifted hopes for better economic times on the horizon, some leading high-tech executives and academics begged to differ, saying the current slump would be prolonged.

"I think we're in a "U," said Cisco Systems Inc. Chief Executive John Chambers, referring to a U-shaped pattern in which the economy falls and then remains depressed for some time before recovering. Chambers' opinion has changed from several months ago, when he spoke of a V-shaped economy, that would bounce back quickly.

He offered his thoughts during a day-long New Economy Forum here, which closed with a highly unscientific survey, in which guests were asked to cast a vote for the economy: "U," "V" or "L," the most feared outcome, in which the downturn continues indefinitely.

Although there were a couple of votes for the preferred scenario of a V-shaped recovery, the more popular opinion was that the economy would go into a long U. And some people suggested it was in an L-shaped trend, at least in California.

"I'd say it will be a U for the U.S. and an L for California," said John Doerr, partner with Kleiner Perkins Caulfield & Byers, the prominent Silicon Valley venture capital firm that has financed several big high-tech and dot-com start-ups, including Amazon.com Inc. and Drugstore.com Inc..

Echoing a common theme of the forum, which was sponsored by the Haas School of Business at the University of California at Berkeley, Doerr said California's energy crisis threatened to weigh down an already fragile economy. He also warned that energy would become increasingly central to the worldwide economy as Third World development spurred demand for power, water and infrastructure.

THE BACKWARD J

Some of the other economic issues that were raised hit closer to home for the group of guests, many who actively participated in the New Economy expansion of the late 1990s and said they were forced to question the value of the high-tech innovations they had helped build. A number of people said they had learned the hard way that just because they could build a new gadget, it did not mean people would want to buy it.

"Consumers will take a look at the technology that is being pushed at them, and they will often push back very hard," said Russ Winer, a professor at the Haas School of Business, who cast his vote for a U-shaped economy.

Michael Powell, Chairman of the U.S. Federal Communications Commission, also spoke about the limits of technology during his keynote address, in which he revealed that all of his mobile gadgets sometimes just complicated his life.

"I find I spend a lot of time insisting that certain devices are used, when I'm on the road," he said. "Otherwise I just have a staff of people with a lot of toys and I don't know how they are going to reach me."

Although the V, the U and the L are commonly cited as the three possible patterns the economy might follow, some of the guests at the New Economy Forum suggested another possibility: a backward "J" in which the economy recovers, but never regains all of its former momentum

"I think we'll have a recovery, but it's going to take us a while to get back to the old euphoria," reasoned Robert Lawrence, Professor at the JFK School of Government at Harvard University.

http://news.excite.com/news/r/010504/21/tech-economy?printstory=1

-- Martin Thompson (mthom1927@aol.com), May 05, 2001

Answers

I vote for a regular J. It'll take awhile to get there, but hi-tech will be up up and away, as never before, when that time arrives.

-- JackW (jpayne@webtv.net), May 05, 2001.

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