VI. Summarise the text, using the words and phrases given below:

to increase by an annual average of around 25%; to account for (no less than one-quarter of the country's total GDP growth); to turn a mild economic downturn into a deep recession; to dampen longer-term productivity growth; to rise to a record level as a share of GDP; to prove unsustainable; to grow at a much slower pace; to shrink (about IT investment); to mirror smth; to slash smth; to enjoy an investment boom; to jump from 9% of GDP to 15%; to shrink (about profits); to tighten credit conditions; to leap (about capital stock in relation to GDP); to imply a 20% fall in IT; to revise smth downwards

VII. Translate into English:

1. Число заказов от фирм на электронное и электрическое оборудование снизилось почти на 20%, что является признаком грядущего сокращения инвестирования в область высоких технологий.

2. За последнее время уровень роста производительности труда упал до отметки в 1%.

3. Америка и Япония имеют разные структуры вложения капитала. Вторая половина кризисного периода в Японии характеризовалась гораздо более мощным ростом производительности по сравнению с ростом производительности в Америке сегодня.

4. Снижение уровня инвестирования в долгосрочной перспективе сказывается на темпах роста производительности.

VIII. Meet as one group. Supply details to prove the following assumptions:

1. The risk of IT investment bust is now rising.

2. A downturn in investment has long-lasting effects on productivity growth.

IX. Working as one group, comment on the following statement from the text:

America's productivity growth is likely to remain above its level of the early 1990s, unless IT capital spending stagnates for several years.

X. Work in several groups. Argue for or against the following statement made in the text:

Business investment usually falls in a downturn, but this time the risks are greater.

Unit 7.5

Venture Capital

Pre-reading task

Read the text , then say what problem it is devoted to.

The venture-capital industry has been a vital ingredient in America's recent economic success. But it may have become too big for its own good.

Venture capital allows entrepreneurs to build a firm without having to borrow and pay high interest charges before they generate any revenues. Without venture capital, people with bright ideas would have to go to a risk-averse bank manager, or fight through the bureaucracy of an established firm that may be hostile to innovation. Other things have been essential to success: stable, low-inflation macroeconomic policies; labour markets that make firing and hiring easy; and an entrepreneurial culture in which people work for little or nothing if they have share options. In the USA venture capital deserves a slice of the credit for transforming its economy from the industrial dinosaur of the 1980s into today's high-growth, high-tech animal. Other countries are therefore right to seek to foster venture-capital industries of their own.

Yet as the venture-capital industry gets bigger and more global, more may not always prove merrier. To use the jargon of the new economy, venture capital is not easily "scalable". Traditionally, it has been a cottage industry. Small close-knit partnerships each invested a few million dollars a year, and partners spent much time advising and monitoring managers as they built a firm into a sustainable business that could be sold to investors in the stock market. Venture capitalists were often a small "cluster", based in such places as Menlo Park, California. Specialisms and reputations were well-known, so would-be entrepreneurs knew who to go to. Successful partnerships are placing more, bigger bets, and have less time for mentoring and monitoring. And this at a time when problems such as recruiting the right people and managing growth mean that start-ups need support more than ever. The Californian cluster of venture capitalists is now a loose global network.

The boom in venture capital reflects the opportunities created by the Internet. But it also reflects a stock market bubble that has been particularly pronounced for initial public offerings. That would mean that much of the money invested in venture capital would continue to be wasted.

Part of the point of venture capital is that, as in Hollywood, many investments yield no returns. Too much investment in innovation is unlikely to be damaging in quite the same way as too many buildings or factories. Yet the venture-capital industry has thrived partly as a disciplined risk-taking process that put as much emphasis on managing as on financing. The wrong lesson for other countries to draw from its success is that, if you simply throw enough money at new ideas, it will stick. That was the approach taken by investors in boo.com, the European sports-goods e-retailer that went bust after frittering away $135171. Too much fertiliser can sometimes be as bad for a plant as too little.