Green shoots are out there somewhere

Recessions end. Even the Great Depression of the 1930s, about which we have heard so much recently, eventually ran its course, though it took a world war to get business booming again. ‘Thatcher’s wasteland’ of dole queues, urban riots and closed steel mills in the early 1980s gave way swiftly to a world of rampant yuppies and triumphant admen.

But when both the British and the world economy finally emerge, dazed and blinking, from the savage recession now upon us, it will look very different. It’s unlikely that hedge fund managers will be raising millions for whizzy new ways of trading derivatives, that property developers will be throwing up glass and steel apartment blocks to be rented to the affluent young professionals of Leeds and Hull, or that Icelandic-owned retail chains will be peppering our high streets anew with bling boutiques.

It won’t, however, be a scene of total devastation. If you look hard enough, in a couple of years, there may be some really great businesses starting to emerge. History suggests that harsh recessions are also periods of exceptional entrepreneurial vigour.

‘Although deep downturns are destructive, they can also have an upside,’ argues Tom Nicholas, an associate professor at Harvard Business School, in a recent study for the McKinsey Quarterly. ‘For companies with cash and ideas, history shows that downturns can provide enormous strategic opportunities.’

Such as? Well, in 1930 a scientist called Wallace Carothers at DuPont, the US chemicals company, discovered synthetic rubber. Then in 1934 he came up with another synthetic material called nylon — and DuPont pushed on with the development of both, despite a sales slump for its existing products at the time.