I recently spoke to a group of managers, including the CEO, from a successful high-tech company that makes semiconductors. I tried to explain why the current global crisis is not another recession or business cycle, but in fact, in every industry, comprises a global paradigm shift — a totally new set of ‘rules of the game’, for doing business. 

As expected, some of the managers expressed skepticism, saying they had heard this line before, in previous recessions. 

Here, then, is my attempt to persuade them, and everyone, why this downturn is different.

A global paradigm shift is a fundamental, major change in the way people (workers, managers, investors) think and behave. Such a shift should be pervasive, sweeping and self-evident. Here are a few of these paradigm shifts, taken from today’s issue of the International Herald Tribune. In this single issue, Feb. 23, chosen randomly (the day after I gave my  talk), we can see many of the key changes now sweeping global markets. Here are 10 of them. Perhaps each individual trend is not massively important — but taken together, they do comprise a radical difference in how we will do business tomorrow and in the future.

1. From luxury to modesty. “A dose of deference and earnest showbiz” by Alessandra Stanley. “Every Oscar ceremony tries to reclaim old Hollywood glamour; this one tried to suit the times by reverting straight to old Depression-era glamour.” Conspicuous consumption is no longer acceptable. Even those with money no longer flaunt it. At last night’s Academy Awards, dresses were more modest. See also: “Advertisers shun Academy Awards spotlight”, by Stuart Elliott. “Consumers change their attitude toward conspicuous displays of consumption”.   

2. Reverse privatization: “As doubts grow, U.S. will judge banks’ stability,” By EDMUND L. ANDREWS. America and Obama will be forced to take over Bank of America and Citigroup. We will see this policy spread, as governments begin to understand that until they nationalize banks and other businesses, they will not be able to look into the balance sheets of these troubled businesses, separate good assets from bad, and relaunch them. This is a paradigm shift, because it reverses the tidal wave of privatization, in which governments sold businesses they owned. Now they will buy businesses or nationalize them. 

3. Reverse globalization. Businesses once went ‘global’ at breakneck speed. Now they are retrenching and returning to becoming more local. “Royal Bank of Scotland faces major retrenchment”, by Joseph Schmid. “Royal Bank of Scotland is preparing a sweeping reorganization of its businesses that could see it exit half of the roughly 60 countries where it operates”. 

4. Return to sanity“Brother, can you spare a few million more?” by Jonathan Abrams. “This is a period of economic-induced retrenchment for many [baseball] teams.” Not only baseball teams. Individuals, investors, hedge funds, companies — all are re-evaluating the bubble-like inflated prices they paid for other companies, for stocks, for assets, for buildings, or even for free-agent baseball players. The IHT account speaks of Randy Wolf, a left-handed pitcher who missed out on a $28.5 million three-year contract with Houston Astros, as the latter ‘retrenched’. Instead he ended up with only a $5 million  one-year contract with another team. Wolf was philosophic about it.

5. …and return to empathy. The wealthy and well-off are becoming more empathetic with those who have little or nothing, and no job. (See above). Wolf said: “I make a very good living and get to do what I love to do. With people losing their jobs and they’re making $40,000 a year and they’re working their tails off 12 months a year to make ends meet, it’s not right for me to complain.” 

6. Nostalgia: When times are hard, we long for earlier, better days. This is reflected in fashion and in product design. “The incredible ’80s”, by Suzy Menkes. “The overwhelming theme of the early shows of London Fashion Week has been a 1980s revival.”

7. Return to sanity in executive pay: Executive salaries, once astronomical, will now become more sane. Some executives may have to give back some of the excessive pay they received in previous years. “Reclaiming pay from executives,” by Gretchen Morgenson.

8. Fierce streamlining of operations“Ryanair plans to scrap airport check-in desks”. Ryanair wants its passengers to check in on-line, and will have only baggage drop counters, and those, only for ‘one in five’ travelers, at extra cost.  Companies everywhere are fiercely streamlining their operations, to boost productivity and reduce costs. 

9. Back to basics: Consumers increasingly take public transportation, and eschew restaurants for McDonald’s, now enjoying an enormous boom in revenues and profits. ”Ridership on subways at its highest since 1950″. In 2008 ridership on NYC subways was the highest in almost six decades. We are seeing major increases in price sensitivity everywhere, as customers and clients who once ignored price now focus on it. Saving is back in fashion.

10. Fierce tightening of regulation: All over the world, regulators are tightening their control over the companies and institutions they oversee. “An investment gian left to wither?” by Elinor Comlay. ” ‘Regulatory requirements are going to dramatically reduce the amount of risk that Bank of America is allowed to take’, said ..an analyst at Morningstar in Chicago.”

These are only ten of the many global paradigm shifts now taking place all over the world. I have doubtless missed many of the most important ones. Readers are invited to contribute their own observations.