More on intangibles and the recession

Earlier this week, I posted an item on how knowledge intensive sectors — professional, scientific & technical services, information industries and the educational services — grew during the recession but have declined in the “recovery.”
A couple of readers got back to me with what seems to be a plausible explanation: the structure of the business. Contracts for these types over activities are on more of a long term basis – or at least are such that there is a lag function. As companies cut back on professional services in the recession, the cuts didn’t actually hit these services until later as contracts were renegotiated.
The opposite seems true about financial services, however. They dropped in 2007 and 2008 and then rebounded in 2009. That makes perfect sense, however, since it is a financial crisis driven recession.
This raises an interesting point, however. Are knowledge creating industries partially countercyclical? Or is there at least enough of a lag that early stimulus support for these industries could dampen a downturn? One of the standard critiques of any stimulus package is that by the time the money gets spent, the upturn has already occurred. But if there are significant parts of the economy where the downturn is delayed or otherwise lags, then the stimulus might actually arrive at the right moment to be the most effective. An interesting thought to ponder (for the next time).

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