The credit crunch has economies throughout the world facing tough realities. The problems arose from higher and higher levels of borrowing and the eventual fear about the availability of borrowers to meet their obligations. Confidence ebbed away and soon lenders found themselves unable to secure funds to lend. Banking relies on creditors being happy to leave their money in the system. When that confidence erodes, savers may withdraw funds fearing for their capital. In a vicious circle of eroded confidence, credit is harder to obtain for individuals and companies alike. When firms cut back, employees may be laid off and consumer demand is affected. The credit crunch is a confidence problem and a credit problem. The two aspects are closely linked.
How can technology help? Thankfully, in much the same way that it has helped in the good times but with the emphasis shifted. In good times technology gives a competitive edge. Greater efficiencies reduce costs and enable human resources to be made more productive by gearing human expertise. In bad times, what gave the competitive edge helps trim cost savings at all levels. Technology doesn’t stand still either and new opportunities are created year on year as new innovations hit the main stream.
Technology in the era of the credit crunch shifts from the role of profit booster to an arguably mission-critical role in cost management and may therefore become an essential element in corporate survival. For firms large and small, technology continues to occupy front row in troubled times.