FCIB's Eleventh Annual Global Conference.(Finance Credit International Business Association)(Statistical Data Included)

Emerging Technologies in Global Credit and Finance

Nearly two hundred credit managers from four continents gathered at the November FCIB-NACM Eleventh Annual Global Conference in New York City for two intense days of meetings on global credit management. Internationally-recognized experts on global economics, e-commerce, risk mitigation and trade credit led conference sessions on both traditional and Web-based solutions to the biggest credit challenges of the new century.

World Outlook

Dr. Stephan Thurman, deputy chief economist for the US Chamber of Commerce, opened the conference with forecasts for the US and world economies. Thurman sketched the outline of what is now the longest economic expansion in US history--almost a full decade of record growth. For the past five years, he noted, the US economy has seen super-charged annual growth rates of 4.5 percent to 5 percent. "We now expect to see some moderation," Thurman said, "but this is a positive development. Growth rates will drop back to the 3.0 percent to 3.5 percent range--a welcomed change." Like many economists, Thurman believes that consumption-led growth at higher rates cannot be sustained without increased inflation.

Given certain inputs of capital, energy and labor, Thurman noted, there is a "natural ceiling" beyond which any economy cannot grow unless exceptional factors come into play. "The question we face now," he said, "is whether we can grow beyond the 'natural ceiling' that the US economy has reached. To bump up the ceiling, we have to raise productivity--output per unit of labor. We can do that by continuing to invest heavily in productivity-enhancing high-technology equipment and software."

High tech investment has played a crucial role in the US economic expansion of the past decade, according to Thurman. "Economists can explain nearly half of the recent increases in productivity by looking at high-tech investment. Without these productivity gains, overall economic growth would have been about half of what it has been," he reported.

Thurman does not believe that the business cycle has been abolished, however. "We will continue to see cyclical movement," he predicted, "but we may not see the boom and bust pattern of the past. Instead, we may see a more subtle cyclical movement around a higher level of growth or a higher trend." This modification in the business cycle is possible, he explained, "because the recent increase in productivity is not merely cyclical, but structural. As Alan Greenspan has reported in his testimony to Congress many times over the past year, we are witnessing an economic renaissance, led by high technology, with real structural change in the overall economy."