The former director of the Office of Management and Budget, Alice Rivlin, balances your corporate budget.

Topic: Managing and Thriving in a Down Market

Rivlin:    I’m Alice Rivlin, and I’m a senior fellow at the Brooking’s Institution. 

Question: How can companies balance their budgets in a recession?

Rivlin:    Well, budgets are all alike there’s never enough quite enough revenue to do what you really like to do so working with the budget whether it’s a company or a school or the federal government is always a question if looking at how can you do the things you need to do more efficiently so that cost are less and how can you get more revenue? In a down market, that’s pretty hard because the revenue is falling and super efficiency may not get you to balance. 

Question: What is the best way to approach risk in a recession?

Rivlin:    Companies tend to become suddenly risk givers, companies and banks and others and afraid to take risk in a recession.  That’s not necessarily the right response but it is a natural one if you’ve been burned to hold back the government is trying very hard at the moment to overcome this risky version on part of businesses and banks and consumers.  People are just very worried right now about doing anything whether it’s buying or producing and that is inhibiting the recovery.

Question: Are there benefits to starting a company during a recession?

Rivlin:    The benefits of starting a company in a recession may well be that nobody else is doing it or that you get the benefit of the talents of people you couldn’t afforded to attract when the economy was really going well but here is some really creative people that want to get together and help you get your business off the ground and they are willing to work for relatively little because they haven’t got anything else to do.

Question: Who are the winners and losers of the next economy?

Rivlin:    If the United States is to keep up in the global raise, we have to be very entrepreneurial and very oriented toward technological change.  That’s our forte anyway.  I think President Obama is right in emphasizing increase a contributions to science.  We need our start up companies which make a lot of the positive changes in the economy.  The general industry is that will benefit least I think are probably at least for a while, luxury retail and the things that sort of went over the top when we were having a big boom. 

Question: Are business opportunities expanding outside the U.S.?

Rivlin:    We’ve seen very high gross rates in developing countries especially recently China and India that’s going to continue they have.  The Chinese have been very dependent on exports for growth.  They will have to shift more overtime toward investing in their own economy and their own consumer sector and that will not be easy, but we will certainly see continued high growth rates from economies that have a lot of potential, a lot of people and a lot of resources and need to maximize the use of those resources.  The developed economies like the United States and Europe will probably grow slower but if we get our economy back in shape and our banking system functioning again, we can certainly have positive growth. 

Question: How can workers stay motivated during difficult times?

Rivlin:    It’s probably always hard to stay creative and stay motivated but it maybe most difficult when things are going really well.  When they are not going well, when there are obstacles to be overcome, a lot of people are at their most creative.