The Concept Of Economic Adaptation

2019/11/26

Economic adaptation, as the name suggests, is about adapting with the economic changes. For illustration consider the case when business was on track and there were no disruptions on any sorts, in the pre 9/11 times. Most of us were living comfortably, spending reasonably and enjoying a decent lifestyle.

However post the terrorist attacks, world economy was left shaken. The attack had economic implications due to which many were left jobless or forced to work at much lesser wages than earlier. In those circumstances, all adapted as per the change. Instead of now spending on luxuries, focus shifted on saving for the necessities of tomorrow. Suddenly there was a crunch and thus to deal with financial problems, spending budget was reduced.

These are well thought intelligent strategies to deal with the modified economic environment and the entire concept is referred to as economic adaptation. At some point or the other, we have all actually followed the theory of economic adaptation in our daily lives. However rarely have we understood technical connotations and thus when there is a mention of the phrase, for a layman, it is a confusing situation.

Economic Adaptation Demands Rationality

The basis of economic adaptation is pretty straight forward. All it suggests is to behave normal i.e. behave rational. Economics is all about using the existent resources to satisfy one’s needs. If the resource pool increases i.e. the economy is able to help you earn more, you satisfy higher needs. However if the resources are scant and economy is unable to provide for enough, one must be rational enough to make a budget and cut down on spending and thus satisfy basic needs. Concept if advocated prepares the population for tougher times. If all get geared to adapt as per the economic changes, a more prepared nation is the result. And anyways, if people are not prepared tough times mandate adaptation and thus lifestyle modifications to suit the new terms.

Individual Perspective

As an individual, economic adaptation requires making a new budget, wherein the new income is now allocated amongst expense heads. If there are too many loans to be paid, loan consolidation could be considered. Some might not afford to continue paying house debt installments and perhaps shifting to a cheaper home could be the only option. In fact if situation does not appears to change for a longer time frame, focus shifts on savings rather than spending. Any holidays as planned earlier, are now postponed. Likewise all efforts are made to cut down on consumption of utilities to save bills. This is the defensive strategy where adaptation focuses on saving for tomorrow.

Company Perspective

Companies too face hard times and thus are often forced to adapt. For the purposes many organizations resort to downsizing or right sizing where they retain, only the most needed employees. Important tasks are prioritized and not very pertinent duties are rescheduled for later times. Likewise all other measures of cutting cost and increasing as much efficiency are deployed, thereby following the principles of economic adaptation.

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