Whilst I reject the notion of the zombie company – which is based on the false premise that productivity as narrowly defined by economists is the essential criterion of a successful business when I am quite certain that is not true….
No, a zombie company is one so burdened by debt that there’s just no way that it can finance its way out of the doldrums.
I thought that the full definition was ” a zombie company is one so burdened by debt that there’s just no way that it can finance its way out of the doldrums, but thanks to low interest rates is still moving. Even though it is technically dead. Also known as Scuba – underwater but still breathing”.
I think a more common definition is that a zombie company is a startup that has achieved some level of success but it has become apparent that it will never rapidly grow to the point that it will meet its backer’s initial hopes.
A company that is to all intents and purposes moribund but is able to survive on cheap debt, paying interest but not capital, in the hope of something good happening in the economy as a whole. Remember Carillion? When they don’t have enough cash-flow to pay the staff then….
Ironic that his statement, relying on the falseness of a premise, was itself based upon a false premise.
The Richie quote is just so bizarre that I cannot summon up the curiosity to find out what idiotic point he is crashing towards in his usual brontosaurian way. Brontosaurus =thunder lizard
Rob +1
It’s the world of the Bertrand Russell paradox – can the set of every set that is a member of itself be a member of itself?
@TD
Don’t think that’s the most common definition – I think I first heard of the term re 90s “zombies” in Japan, and that was definitely about firms that had take on too much debt to repay but nevertheless were being artifically kept alive as too impolitic for them to be allowed to fail…
One of those term which, while it might have been coined to describe something very specific, is too evocative to be confined to specialist use. People hear it, guess what it means, use it because it has intuitive appeal; before long everybody knows what they think they mean.