Stars of the Recession
Foroohar, Rana, Schneiderman, R. M., Newsweek
Byline: Rana Foroohar and R.M. Schneiderman
Amid the economic rubble, several industries are standing tall. Here's where the jobs are.
In the fall of 2008, roughly nine months into the Great Recession and just before Lehman Brothers collapsed, Rob Peck, 27, was losing money almost every day. An equities trader working for a small firm in Miami Beach, Fla., Peck and his company were leveraged roughly 30 to 1 and getting killed by computerized trading programs at larger investment houses. "I saw the writing on the wall," he says. "A lot of my mentors were feeling the pain, and they were much better at it than I was. I figured, if the baskets aren't sinking for LeBron, what chance do I have?"
Before the bubble fully burst, Peck found another job as the marketing manager at a small software-development company called SDSol Technologies. "I was still pretty young, and I could afford to figure out what road I was going down," he says. The company, which provides Internet and custom software development for other firms, employs Web developers in Pakistan and the U.S., and a sales and marketing force in South Florida. Its products, still mainly sold locally, also have great export potential to small and midsize businesses in emerging markets. "We're small, but there are opportunities here," he says.
In fact, the same is true across many parts of the economy in the U.S. Yes, growth is still slow and unemployment is high (nearly 10 percent). And the federal government is, post-election, likely to be gridlocked on issues such as tax reform, infrastructure spending, research and development investment and the buildup of social safety nets--all of which could help jump-start the economy or at least cushion the blow for those out of work. But this recession is different from those of the last half century. Previously, job losses were spread broadly throughout the economy. This time around, they are mainly concentrated in three sectors: construction, manufacturing (particularly the automotive sector), and finance. That leaves plenty of other parts of the economy that are relatively untouched, and some--such as education and health care--that are rapidly growing. There are less obvious areas of growth, too. Plenty of export-oriented businesses are booming, as are technology firms and anything to do with commodities or agriculture. Even some high-end manufacturing is starting to rebound.
The connective tissue between many of these categories is overseas markets, particularly emerging ones. The boom in agriculture and commodities of any sort is mostly a tale of the high-speed growth of emerging markets, which are now demanding more of everything from meat to energy. But any company in any sector that caters to fast-growing developing nations such as China, India, Brazil, or a host of others is most likely doing very well. That's quite a few firms--since the majority of the country's largest businesses now get more than half their revenue from abroad. American export growth, typically about 7 or 8 percent, is now in the double digits.
It's no wonder: according to Goldman Sachs, 70 million new consumers are joining the emerging-market middle class every year, and they want the electronics, consumer goods, and furniture sold by U.S. firms (companies such as Apple and Procter & Gamble are among those benefiting off the back of this growth). Their governments are also busy building new factories, roads, and bridges--meaning new business for U.S. firms that make complex machinery. "These countries have huge infrastructure needs. Their markets are going crazy," notes Deborah Wince-Smith, head of the Washington-based U.S. Council on Competitiveness. Hence, despite steep job cuts early last year at companies such as Caterpillar and John Deere, those firms--and a host of smaller ones that service global machinery makers--have now ramped up hiring.
f course, none of this means that manufacturing as a sector is going to rebound as a percentage of the American economy. …