Vs, Us, and Ws. This isn't about the alphabet...

In the March 2009, our Global @dvisor report described the "Gathering Storm" of the economic crisis we are now living through. Our major point was that we need a new language to talk about the crisis. In our view, it's not useful to describe the crisis as a recession or a depression. That's because both terms are too narrow and backward-looking to accurately describe what's happening. We argued that the term "disruption" more accurately describes what global citizens are experiencing. Why disruption? Because it implies that the change is more fundamental than a garden-variety economic slowdown. Established economic patterns and relationships have been disrupted, and we are transitioning into an environment that's very different from the one we remember.

In their struggle to keep up with this new world, practitioners of the "dismal science" have attempted to develop a new economic alphabet to describe the disruption. Will this be a "V" recession, with its short, sharp reduction in economic activity followed by a fast and robust recovery? Or is it a "U" recession, with its more sustained trough, and its similarity to previous recessions? Or, is it a "W" recession, which is really two back-to-back Vs or Us, depending on how you see the trough.

While this is an interesting exercise, it's all rather misleading because the new world will look very different from the old. To us, a more useful activity is connecting with consumer citizens to understand how they are responding to the crisis, and how their behaviour will determine the nature of the recovery. A few points on this:

• Global @dvisor shows that consumer citizens are responding to the crisis like a corporation would - they are deleveraging. This is reflected in such coping behaviours as cutting personal spending, and increasing personal savings. The right question to ask is, how long will this deleveraging process last? Are we entering a new and enduring era of perceived scarcity? What signals will indicate that consumers are ready to spend again? And, what will they want once they do start to spend again? One interesting finding from Global @dvisor is that mobile phones and cable TV are becoming "essentials" for many consumers. Have other technology products crossed the threshold to be considered household necessities? And, what does this mean in terms of trade-offs with other consumer products and services that are "former" essentials?

• There's a global consensus that the most important issue facing the world today is jobs. So, regardless of whether the recovery is a U, V or W, if it doesn't produce jobs, it will not be a recovery in the eyes of citizens. There's potential here for considerable political and social disruption if governments are unable to act as swiftly to create jobs as they did to bail out financial institutions and car makers. We're already seeing the "green shoots" of unrest, especially in Europe, manifesting itself in a swing to the right. Witness the European elections. When the European parliament next meets in Strasbourg, its 736-seat legislature will be dominated by a much larger group of seats on the right, many fewer seats on the left, and a worrisome formation of the "angry." Obviously, local factors played into this (UK and Spain), but voters generally favoured both centre-right incumbents (France, Italy, Poland, Germany), and far right extremists. Get used to hearing more about the British National Party, the True Finns and the Party for Freedom (Netherlands). Recrudescent fascism? We'd doubt it. But, still a reflection of public anger about the economy, immigration, and the concept of a Greater Europe. In the US, President Obama's high approval ratings (we're tracking him in the 60s) are unlikely to hold up if his economic stimulus plan doesn't resuscitate the moribund labour market.

• In spite of the dominant voice the US has in the world's financial media, this isn't all about the US economy. True, the spark that started the crisis was lit in the US, but the firestorm that emerged hasn't burned all nations the same. This edition of Global @dvisor shows that economic confidence dropped first and farthest in the US, but now seems to be steadying. For some emerging markets, if confidence declined at all, it has risen sharply since our last survey in late 2008, while Europe is still falling with no end in sight. So, in some countries it might be a U, in others it will be a V, in still others it won't be a letter at all.

Given these three lessons from Global @dvisor, it's clear that the world's political and economic leaders would be wise to understand that the trends of the past have been disrupted. And, that picking a letter to describe the anticipated recovery is not nearly as important as understanding the views of consumer citizens - they will determine where we go to from here.

The Ipsos Global @dvisor is a semi-annual, online survey of 23,000 consumer citizens in 23 countries across the globe, covering 75% of the world's GDP. It produces syndicated reports and studies specifically tailored to the needs of corporations, advertising and PR agencies, and governments.

The current report contains data from the fifth wave of the Ipsos Global @dvisor. Countries covered include: the U.S., Canada, Brazil, Mexico, Argentina, South Korea, China, Japan, Australia, Russia, India, Czech Republic, Poland, Turkey, Sweden, Netherlands, Belgium, Germany, France, Italy, Spain, Hungary and Great Britain.

In this wave, 23,237 interviews were carried out between 14 April and 7 May 2009. Internet representation is balanced by age, gender, city population, and education levels, with minor added weights applied. Approximately 1,000 interviews were carried out in each country, representing a +/- 3.1% margin of error at the 95% confidence level.

For more information on the Ipsos Global @dvisor, visit http://www.ipsosglobaladvisor.com/ or contact [email protected]. To learn more about Ipsos Public Affairs, visit http://www.ipsospa.com.