Industries that thrived during the Great Depression.
or, this has all happened before and it will all happen again.
We’re living through “interesting times.” Damnit.
Watching the chaos Covid-19 wreaks on the economy, our public social and healthcare infrastructures, and my house (the kids have been home for SIX DAYS, OMG!), it’s hard not to think about the greatest analogous disruption of American and global life. No, not the 2008 financial crisis—though that certainly shook up many a career and perhaps an entire generation’s ability to own a home. I mean the transcendent modern crisis, The Great Depression.
As hard as it may be to believe, some markets thrived during that global economic buzz kill. Actually, a lot did. Most are pretty obvious, but if we’re looking to roll in new clients or land new jobs during our current economic unpleasantness, these might be the sectors to watch. And one of the things they all have in common isn’t just their indispensable utility, but the way each one historically managed the balance between risk and uncertainly—that is, long-term objectives versus the needs of short-term crises.
Food
People still eat (well, most of us do) regardless of income and even when foregoing health care expenses.
The classic Depression-era example is Kelloggs versus Post. The former choose to advertise more during the depression while the latter slashed their advertising budget. And when the market and consumer budgets recovered, Kelloggs remained top of mind and benefited from their consistent position.
Household products + essential consumables
People still need soap and solvents and diapers and gasoline and stuff. And they still need their perceived essentials, too, like alcohol, coffee, marijuana, and … toilet paper.
Camel almost destroyed Lucky in the 1930’s because people still needed cigarettes. In our epoch, maybe people need coffee like they once needed cigarettes (could this be the perfect opportunity for Jittery Joe’s to destroy Starbucks? Or for a liquor delivery service to transform Saturday nights?).
Healthcare
We are living through a severe test of Americas semi-capitalist, semi-socialist healthcare system. And within that ecosystem, the need for disposable good to keep our health professionals safe, ventilators to keep patients alive, and symptom-mitigation products (typically, pharmaceuticals like Tylenol or Zofram, which my wife was prescribed for her Covid-19 diagnosis). The race for a cure, a vaccine, and a scalable treatment is already generating a lot demand and investment.
Communications
Print and radio boomed during the depression. Nowadays, streaming and teleconferencing. I’m reminded of a friend of mine who recently canceled his cable because it wasn’t essential but kept his fiber Internet and cell services, because he needs those to work from home and to binge watch Lego Masters with the kids and Devs with the wife (the friend was me…).
In particular, teleconferencing services like Zoom are the ones to watch. With social distancing dominating public discourse, teleconferencing may end up being the glue that holds society together—from the elementary classroom to the creative workspace and everything in-between.
Capital goods
While the new production of capital goods during the Depression was almost zero, the resale value of those same good increased as the crisis dragged on year-over-year.
Nowadays, there are a lot of industries preparing to sell off their means of production or transform that production to support the healthcare space. And someone must handle that transaction. You can bet that if a stimulus package hits, and infrastructure or logistics projects are incentivized at the state and national levels, the market for repurposed or resold capital goods will quickly follow.
Security
It’s the simplest arithmetic of the Depression, or of any recession: As the economy declines, crime rises. Despite budget shortfalls, local, federal, and military security forces will be increasingly called upon to secure our safety and cordon quarantines communities. Likewise, security consultants aren’t only needed overseas in war zones—as a recession kicks in and economic and health struggles lingers, they may become more valuable domestically.
Anyone who keeps advertising + innovating
This is the single greatest economic truism of the depression: The companies that survived and grew during the Great Depression weren’t representative of any one market category. Rather, were those that continued to act as though there was nothing wrong and that the public had money to spend on their services or products.
They advertised. They innovated. They kept working confident the crisis would end. This is the arithmetic of risk versus uncertainty. Successful Depression-area businesses didn’t know how or when the Depression would end (uncertainty) but they knew it would end and that efforts and expenses made in the interim would pay off when it did (risk).
Who says a history degree is useless. Just wait ’til Germany invades Poland again and you’ll see what I mean (’cause you know they will…)
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