Is it me or has business been hoarding it’s optimism as we wait for the political class to come the rescue of the global consumer.
If that is so, then when do we start to plan for the future? It’s widely acknowledge that local political leaders are behind the start line and still putting on their running shoes. Isn’t it about time global trading companies changed their collective approach. Is now the time to create opportunity beyond today, to look to the future and say to ourselves “Where do I want to be in 3 years time”.
That’s what every MBA course will tell you. “Plan for the future and deliver today”. The problem is we are so scared of the future, we have forgotten to look beyond today. It’s worth asking yourself what you are doing to create wealth for yourself tomorrow. Very soon tomorrow will become today, and you won’t have a plan.
Recent History.
In 2007 we ran a series of seminars where we predicted this economic down turn. (reference http://www.categoryvision.com/global-outlook/) We argued that the growth in commodities and the cash volume required to sustain the global aspirational growth cycle the world was in, would run out.
What triggered this debate was the rise in the Euro against the dollar, which at that time was being referenced as a safe haven currency. How times have changed. Identifying the unusual, allowed us to examine the facts and recognise that a global currency based on cross boarder trading, without political and financial union was a risk. We didn’t have the nerve at the time to flesh out the value of that risk, because already it was looking too extreme!
Ironically it was the abandonment of global fiscal control by the world leadership in the mid 90′s, that allowed the consumer to demand more goods and services. The global economy grew as emerging markets needed wealth to finance it’s exploding populations. Enter India, China, Brazil and Russia to produce the goods that we in the developed economies demanded. How was this demand created? By relaxing consumer credit, which we consumers in the zuK and USA, then pumped into real estate, which kept increasing in value.
America, UK and Europe had been persuading the embryonic political democracies of the BRICK’s to create manufacturing based economies. This initiative had been promoted for the past decade. This manufacturing strategy met the growth in demand for consumer goods being created in the West. Optimistic growth and wealth forecasts allowed western governments to provide for an affluent, yet ageing economy.
The EU currency had a huge dependency on the public sector for employment in southern EU countries, a bloated pensions dependency in the northern EU sector and in the USA and UK we had a need to create cash to service the finance sector and our ever increasing credit crunch debt.
In the UK the liquidity of global money created individual wealth for some whilst delivering huge tax receipts to the exchequer, to fund the public sector investment program launched by the then Labour government in 1997. This investment program in the public sector was long over due, as previous administrations had continually over looked the need for a robust health and education sector.
With public sector investment initialised, the UK set about transforming its economy from a serviced based economy to a knowledge lead trading nation. Incidentally this was the second time in twenty years the UK Plc was being asked to make such a paradigm shift. Intellectual property and “Smart Co’s” had been identified by the financial strategists as the correct direction of travel for the UK economy.
Bio sciences, mobile and device infrastructure development was seen as the way to go. ( not surprising therefore that the guts of the IPhone developed by the UK in UK ). I know Steve Jobs was a genius, the man who got the IPod to market, but the guy who designed all of Apples products from the iMac forward, was a Brit. Educated in London and Newcastle, Sir Jonathan Ive, knighted Jan 2012, was the design force behind the iconic Apple brand.
The chip used in the IPhone and most mobile devices was originally developed in Cambridge, Great Britain in the 1980′s. The worlds largest mobile network operator is Vodaphone, a UK company based out of Newbury. We lead the patent market in Bio Science, we have always known how to invent and design.
The future of UK Plc lies in its entrepreneurial knowledge program. “Small is the new Big” to quote Seth Goddin, but we need the business culture of risk adverse management to change.
We have a generation of business leaders, politicians and strategists who are under forty. Male or female, age doesn’t discriminate. If your over forty and still in the game, you are in a privileged and key position. Why? Because the chances are you have lived through two, if not three recessions. Those under 40 haven’t. The sooner the government and company shareholders wake up to this fact the sooner we can come out of this situation, which many believe has been bought on by fear and analysis paralysis. Yes there is no liquidity in the financial global system, but the corporate global economy is loaded.
RIM is about to be taken over because it is considered to weak to compete, despite the fact it has $ 1.5 billion in the bank. No doubting like Nokia and Motorola, RIM is a busted brand, but what’s going to happen to that cash? If RIM had spent the money in the good times, instead of thinking IPhone wasn’t competition, maybe it would be in a stronger position. But that $1.5 billion is next to useless right now. And RIM isn’t unique. There are many big companies out there thinking too small.
Let’s look at some game changer decisions from the past. Nokia was a lumber company that produced rubber trees as one of its bi products. It used that raw material to become the largest manufacturer of mobile phones globally. Nokia became so good at it, that it designed the IPhone of its day, the 6310. Then it sat back and did nothing. Now it’s managed by Microsoft, a company that uses its money to regenerate itself every five years. Microsoft was never the first to develop anything, but when it went into market it’s goal was to own the space. It used it’s cash reserves to grow.
My point is this, companies need to stop hoarding and start investing.
So where is the future? What does it look like? Many UK students are enrolling on Bio Science degree courses some to become Bio Science entrepreneurs some are wanting to pursue a career in the global financial. Others are developing legal and accounting skills, but all are moving into the knowledge economy that the UK will be so dependent upon in 2020.
So isn’t it time UK Plc stopped planning for today and started to look towards the future. We are the world leaders in transition management. No nation has morphed as much as we have in the past two decades.
It’s time to move beyond “now”
