It seems like experts in all financial fields agree on one thing these days – that the recession is here and there is no quick way out of it. In such bad times, the new media has surprisingly come into the spotlight as one of the possible causes of the crisis. Cynthia Owens, Adjunct Associate Professor in Communications and New Media, says new media is a scapegoat, but it also provides a solution.
“The economic crisis clearly demonstrates the power and peril of the new media,” says Adjunct Associate Professor Cynthia Owens.
New media plays such a huge part in our current lives that almost everything can be linked to it. Like a coin, the new media has two sides to it.
“The Internet moved information instantly to people more quickly than ever before, possibly hastening stock market declines,” points out Adjunct Assoc Prof Owens.
But she explains that new media or the Internet didn’t cause the crisis. The real peril of new media is the threat to conventional media.
Business leaders and executives know that the worldwide web is a tool that facilitates quick and effective communication. Now they are learning that they can go directly to their stakeholders via this useful instrument. This makes the Internet a powerful and cost-cutting gift from the new world.
Adjunct Assoc Prof Owens believes that this is bad news for both new and old media.
She says that “new media” is really a misnomer. “Mainstream newspapers and television news channels are the most popular news avenues on the Internet. The number of new online-only news sites that are widely read, influential and trusted is relatively small.”
Indeed, in financial news, new technologies do move news more quickly to larger audiences, but Adjunct Assoc Prof Owens wants to remind everyone that in the world of finance, news always moved fast.
Some past examples
She brings up the example of the 1929 stock market crash in the United States of America, where information raced around by ticker tape.
In the instance of the 1987 crash, before the modern Internet was a available to the world, bankers and stock traders were linked around the world by in-house computer trading and communications systems.
“The news media has been criticized for failing to predict the current crisis,” Adjunct Assoc Owens identifies. “But as long ago as 1999, mainstream and business media in the USA reported on questionable mortgage practices. Regulators did nothing.”
The Truth is….
The truth is that media reports the news and covers trends. But when the best minds in the finance and economic sector, including the heads of every major central bank, fail to recognize the danger, it is almost impossible for the media to report that a crisis is looming.
“The proliferation of information on the Internet does force the public to decide what to believe,” says Adjunct Assoc Prof Owens.
Some on Wall Street, including bankers at the now defunct Bear Sterns, have alleged that anonymous and malicious rumours circulating on the worldwide web caused the massive selling. However, that is nearly impossible to prove.
Adjunct Assoc Prof Owens is not ordering a witch-hunt on the Internet. “Going forward, what is clear is that business leaders are beginning to realize that the new tools give them a lot more opportunities to connect and engage with their stakeholders, both internally and externally.”
In fact, the new media can even be a tool to help companies recover in the next year and prepare for a quicker recovery after the crisis.
The Internet can help companies get clear information out quickly, listen to their customers and increase transparency within their organization.
She encourages reluctant Singaporean executives to follow the footsteps of organizations like Dell and Deloitte that are using web 2.0 tools to engage the public and win new customers.
“Coming out of the crisis, the news media will be just one way for successful companies to reach customers, employees and other stakeholders.”
Cynthia Owens is an Adjunct Associate Professor in Communications and New Media with the NUS Business School, where she was named CNM outstanding adjunct lecturer in July 2008. She is one of the region’s most experienced journalists and media executives with two decades of experience with top news companies including The Wall Street Journal, ABC News and CNBC Asia. Adjunct Assoc Prof Owens is the founder of AsianEdge Network and helps companies develop communications strategies and trains business leaders in communication skills. She also spoke at the recent ‘MBA Back to School’ Seminar.