2013… 3rd Quarter Economic Forecast

 

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Our firm is having a very nice year, so far, and the outlook for the second half is positive. We measure success based upon the number of inquiries we receive for our executive search consulting services and top-line revenue received. Based upon both indicators, we are up over 35% in comparison with the first six months of 2012. We anticipate hearing from more of our university and corporate clients who need the right leaders to help further energize/transform their organizations: (for universities; Deans, VP for Research as well as CFO, VP Enrollment etc. and for corporations: C level leadership, VP Sales, VP/Director Research/Product Development etc.). Our market niche…where academic research meets corporate innovation is fascinating and constantly active.

Are you feeling a little unsettled or giddy about the coming quarter? The recent announcements by FED Chairman Bernanke had to happen. Anyone who was surprised by his comments hasn’t been paying attention to the bigger picture. Our economy here in the United States is continuing to benefit from unprecedented low interest rates that will continue that way until employment dips below 7%. I am not an apologist for the FED Chairman but in my view his recent comments that the day will likely come when FED easing will come to end is simply logical, and very evident. The negative market reaction was also predictable—“sell, and bar the door!” But then within days, the “longs” have come back in fashion since the FED has plainly stated that tightening of monetary policy won’t be materializing until unemployment recedes. It seems apparent now that FED tightening in 2013 is not in the cards. So, my forecast is for GDP growth to edge up to around 3% by year end and unemployment to fall to near 7% will likely be happening and with that the DOW could be around 16250 on 12/31/13.

Corporations with cash hordes who fail to re-invest their money into R&D, new product development, internal efficiencies (–and yes, hiring, too) are risking future share price appreciation and earnings growth. Earnings growth happens when new products and services are brought to market which customers need and want. Major corporations like 3M, Corning, IBM, J&J and Google are constantly innovating and when they introduce a great product like Corning’s “gorilla glass” the future can look extremely bright for their constituents because an application like that brings added confidence to doing what it takes to discover even more amazing new knowledge that can be successfully commercialized.

Universities who see an opportunity to expand their research emphasis and then create the necessary infrastructure to further their investigations in areas like Life Sciences, engineered materials and information technology will find federal agencies willing to accept their grant proposals even during this more austere era of government funding. It is never easy to win research funding support but top principal investigators who are proactively supported by their department chairs, Deans and VPs for Research will find that they will more often become the recipients of significant funding. Linkage of university research with corporate technology and product development groups will continue to be a winning approach.

I will be interested in your comments and hope that you find my forecasts and commentary useful.

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About Keith Kulper

Keith D. Kulper is the president and founder of KULPER & COMPANY, LLC an executive search consulting firm working in the area of senior level leadership for academia and corporate innovation. We are strong advocates of nurturing the linkage between academic investigation/research and corporate innovation/full commercialization of new product solutions. We specialize in attracting proven leaders who can effectively drive transformational change. The firm operates an Advisory Board that meets annually to bring together leaders from academia and corporate innovation to help drive continuous improvement of our professional practice. We are also an investor in early stage companies. We take pride in supporting the growth and development of business and engineering schools at leading universities throughout the United States.

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