"Consumer spending has been based on an illusion of wealth which is based on debt."
MARK THOMAS, PA STRATEGY AND MARKETING EXPERT
Mark Thomas, head of the strategy and marketing practice at PA Consulting Group, gives an overview of the zombie economy following the launch of PA’s new book The zombie economy: leadership in times of uncertainty. In the interview on the Danish TV channel Borsentv Mark outlines what he means by the zombie economy – a new corporate landscape dominated by half-dead-half-alive zombie banks, governments, consumers and companies.
Starting with the zombie consumers Mark points out that consumer spending has been based on an illusion of wealth which is based on debt. The collapse of the economy means that consumers simply can’t consume as they did before as debt is not available. Instead they are now saving, meaning that consumption is down.
Mark goes on to talk about zombie companies. Many have too much debt and, with falling consumption comes falling demand and a vicious circle. For longer term success Mark says that businesses must prepare for a different world. There is a change in behaviour and spending patterns and risk aversion is more prevalent than ever before.
Mark comments that a lack of liquidity remains a big issue for zombie companies. Mark says that this is a key factor in deciding which organisations are going to be winners and which will be casualties. Mark also talks about the danger of irrelevance in the changed world.
Mark concludes that the zombie economy will create winners as well as losers. In the new zombie world capital is a competitive weapon. If organisations can adapt to meet the needs of zombie customers and make these changes quickly they can make ten years progress in the next few years.