The economics of perseverance.

• Author: Binnings, Tom
• Position: The ECONOMIST

THOMAS CARLYLE SAW PERSEVERANCE AS the secret to a successful life. He wrote, "The tendency to persevere, to persist in spite of all hindrances, discouragements and impossibilities--it is this in all things that distinguishes the strong soul from the weak." While this certainly rings true in light of two summers of Colorado wildfires and the slow recovery from The Great Recession, it also represents a somewhat countervailing perspective to economists.

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As an applied economist, I get paid to forecast the future based on observable data and trends. I gave my first paid presentation as a young 20-something to business owners in a small Colorado community with a declining downtown. They were applying for a government grant and the firm I worked for was hired to assess the market feasibility of revitalizing the city center. This downtown, like so many, barely survived decades of decline as automobiles allowed people to find better values shopping in more distant districts. Revitalization was a tall order and I concluded the government should invest scarce resources elsewhere.

It's certainly more fun when objective economic conclusions affirm what the product developers, entrepreneurs or city leaders believe in their guts to be the case. They have vision, and with capital they know success can follow. And sometimes it does, regardless of what economists conclude, thanks to perseverance.

So what really determines the future of a new product or project? Every banker knows that less debt helps projects endure hard times. Startup strategists argue for lower upfront fixed investment costs until the market is proven. Most marketers argue for quality implementation over detailed planning. While these are all important considerations, the stamina to persist against all odds could well be the key ingredient, especially important when there is a fundamental paradigm shift due to innovation or other overwhelming forces.

Last month my wife and I stumbled across Seligman, Ariz.--off I-40 along old Route 66. Our not-so-smart phone said there was an A&W there and a root beer float sounded great on a hot day. After driving into Seligman, we discovered the A&W was really Delgadillo's Drive-In in the midst of a mini-tourist haven. How could a small town on an abandoned road with a population of fewer than 500 be thriving? I wish I could say that as an economist I was compelled to discover thy answer. But the truth is I needed a haircut, and...