The economic storm may be calming but there are vital lessons to learn before we kick the fast-buck habit

The deep global recession will have long-term consequences greater than we first feared. Once the bottom has been reached, a slow recovery will start. For now we're assessing the damage because in a few months the upturn may begin.

An economist's definition of recession linked to GDP may be correct, but it is not enough. It fails to count the cost to the country, which must be measured in terms of unemployment, family income, home ownership and mortgage values, domestic spending and living standards.

We can learn from cataclysmic events such as Hurricane Katrina that destroyed large parts of New Orleans in 2005. The city is slowly coming back to life, with its jazz musicians writing new songs about the disaster and Bourbon Street bar patrons drinking Hurricane cocktails.

But New Orleans has 17 target area recovery plans, and it may take more than 20 years to fully revive. The hurricane risks were well known, but there was insufficient coverage from the city's dykes combined with a view that such an event was unlikely. It was much the same way the financial community viewed the collapse of derivative trading markets and the resulting recession.

This slump will probably exceed that of 1929, when recovery took a decade or more. It may be valuable to look back further to the decline of Venice or the recessions that followed natural disasters such as the Black Death in the 1400s. All these events had global consequences
—and so will this downturn. We will not witness normality at the consumer level for up to 10 years. And worldwide structural changes will evolve over time.

Businesses are bust, people have lost jobs, economic empires have collapsed, and the banks have taken the core capital and destroyed trust. The UK is suffering more than its European Union partners from high national debt and the loss of manufacturing and other businesses to the EU, India and China. This is made worse because London's trading markets can easily move electronically and physically to anywhere in the world. 

But let's not focus on doom and gloom. Instead, we must form new partnerships and leadership solutions. The core issue is to find new supplies of capital other than the financial community. These sources must have the will and ability to invest. We must invest in people, products, clients and other stakeholders, without looking for short-term returns.

Another issue is the number of employees made redundant who risk becoming unemployable either due to age, economics or cultural resistance to downsizing and career change. These will mostly likely be middle and intermediate managers over 45. But they won't be offered positions of lower stature, re-education, or re-skilling programmes.

The fast-buck trading game is over and the repair to capital markets and supply points of liquidity will take a long time. Financial markets will never be the same, but it will take a decade or more to stabilise and re-regulate internationally. The age of greed at the top will be banished by the public, markets and further regulation. More collegial organisations will evolve and co-operation within the value chain will rise, stimulated by wise outside advice.

The storm may be nearly over. Let's think how we rebuild a better enterprise.

Dick Stewart is managing director of Strategic Insights International