Why the fundamentals don't point to a lightning quick economic recovery and a great platform for innovation?

Why the fundamentals don't point to economic recovery and a great platform for innovation?
Let’s start by looking at some key financial metrics.

1.% of public debt to GDP and is on the rise
2. % of external debt to GDP and is on the rise
http://www.networkideas.org/news/mar2009/news30_G20.htm

3. P&L for National and a large section of economically critical industries are reflecting the following;
a. P&L are very weak with poor cash conversion cycles
b. Negative FCFs (Free Cash Flows)
c. In the balance sheets;

Liabilities
Owners Funds
i. Capital Reserves are dwindling
ii. Retained Earnings are coming down

Long Term Loans (Mortgages, Loans, Term loans, Bonds, etc.)are on the
rise with no real substantial justification with respect to asset and
revenue growth

Current Liabilities are all on the increase
Accounts payable
Short-term loans
Miscellaneous (Other short term liabilities)

Assets

Fixed Assets (FA) are now Mark-to-Market not the real value and over leveraged
Intangibles
Net Fixed Assets
Long Term Investments

Working Capital are showing great strains and capital infusion (Such as from
governments) is only impacting liabilities both short term and long term
with fundamentals missing such as revenue on real current CCCs

Current Assets (CA)are showing great stress in value MTM & PV of all
investments negative
Inventories up (MtM value of inventories down)
Accounts Receivables (Up and working capital impacted, with higher cost of
debt)
Cash (being spent on servicing debt and working capital)
Miscellaneous (Short term assets)

This at the end of the day creates no value from the products and services and thus no real FCFs (Free Cash Flows) from revenue, rather the FCFs being created by debt, freeing up capital from the P&L and Balance Sheets with no real creation of assets that are being consumed based on PV (Present Value) and IRR lower than principal value of capital.

http://www.imf.org/external/pubs/ft/weo/2010/update/01/index.htm

http://seekingalpha.com/article/125072-debt-loads-of-g20-nations-japan-u-s-deep-in-the-hole

http://www.oecd.org/document/4/0,3343,en_2649_33733_20347538_1_1_1_1,00.html

www.un.org/esa/policy/wess/wesp2010files/wesp2010pr.pdf

http://www.weforum.org/en/events/AnnualMeeting2010/Fri29/index.htm

http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/0,,contentMDK:22216733~pagePK:64165401~piPK:64165026~theSitePK:469372,00.html

So where is this going to leave everyone. Like Warren Buffet says that he does not forecast or predict but look at the basics and numbers, what is being reflected that the implosion probabilities are high and this represents great opportunities on an unparalleled scale for innovation around new business models that impact the most critical industries in society, ie. BFSI, Energy, Healthcare, Water, Transportation, et al on which "Micro" will be the next Macro and all based on Prosumption economics, rather than on consumption economics.

2010 is panning out to be a great year for fundamentals as Net Worth of an individual, community, society, business or government tells the whole story and the rest like they say is perception.

http://fellows.rdvp.org/gerard-rego/the-shift-to-a-prosumption-economic-model-from-a-consumption-model-is-the-future-of-capi

It is that all the great innovations largely came in from the downturns and rather than the upsides of society and the tectonics that are shifting indicate tsunamis of innovation for this is really the big takeaway from the lesson of capitalism.

Here are a few examples that created industries and companies from the jet engine and logistics to microwaves and the technology.

14 Big Businesses That Started in a Recession
Thought you couldn't start a company during a recession? These enterprises made it big by doing just that.
http://www.insidecrm.com/features/businesses-started-slump-111108/

Areas of technology
Almost all types of technology were utilized, although main areas of technology which saw major developments were:

http://en.wikipedia.org/wiki/Technology_during_World_War_II
Weaponry; including ships, vehicles, aircraft, artillery, rocketry, small arms, and biological, chemical and atomic weapons.
Logistical support; including vehicles necessary for transporting soldiers and supplies, such as trains, trucks, and aircraft.
Communications and intelligence; including devices used for navigation, communication, remote sensing and espionage.
Medicine; including surgical innovations, chemical medicines, and techniques
Industry; including the technologies employed at factories and production/distribution centers.

What Did the Winners of the Last Recession Do Right?
http://www.accenture.com/Global/Research_and_Insights/Outlook/By_Alphabet/WhatRight.htm

So what look like new areas of innovation? In my opinion the profit-pools of industries that will be disrupted by business models that enable greater effeciencies and value creation. Industries & Sectors ripe for disruption;

* Agriculture
* Energy
* BFSI
* Healthcare
* Mobility (Personal & Mass)
* Retail
* Manufacturing
* Education
* Secondary & Tertiary services
* FMCG
* ICT

The next few years look very exciting, especially for for-profit social businesses that are driven by intermediation and around fragmented demand-supply chains.