Did you feel the world shift dramatically this week? I did. Here’s how, and the good news for Australia’s SMEs. COLIN BENJAMIN
By Colin Benjamin
It is highly likely that Obama will become the US president. And already we are seeing a major shift that began yesterday that could signal that the US economy is at last turning around. Obama 08 will mirror the economic conservatism of Kevin 07 and take the US in a completely new direction. What does that mean for Australia’s small and medium businesses? Lots of opportunities, and here is why.
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First, with Obama as president we will see the realignment of the US into a domestic growth economy. Obama, like Rudd, will herald in a new regime where the rich get taxed and the poor get tax credits. US investors and entrepreneurs will be pulled back to the domestic economy by this realignment of priorities.
Technology developed for overseas markets will be refocused on the US. US investors who have been encouraged by tax credits to invest offshore will invest back in the US economy.
That will be supported by all the small banks across the US that took on board the comments by Bernanke on Wednesday when he told Harvard graduates that the profits from foreign direct investments are now the stabilisers for a growing domestic economy, and make inflation a bigger threat than recessionary trends.
In the last month the private sector unexpectedly added 40,000 jobs, despite economists’ predictions of a 30,000 fall. The tax cuts and housing rebates, coupled with the imaginative approach of the Fed in bailing out the large financial institutions, is slowing the rate of decline in the economy and setting the scene for a second half growth in export markets.
Second, look out for a new business environment in the next financial year. I believe the turnaround has started. We will see US stocks rise as investors move their money from oil and gold back to equity stocks. (This will save Rudd as oil falls back to $100 a barrel.)
This represents a turnaround that needs to be factored into smart company business plans as a tipping point in forward operations. The automotive, financial and home construction industries are revising all of their expectations in the light of a change in consumer lifestyle choices – smaller cars, bigger savings and less retail expenditures.
Smaller businesses are expanding their global reach, improving their productivity and taking on new employees as consumers make the switch to better quality products and local services.
Third, we are likely to see major realignments of economic direction in the coming year that represent business opportunities for smart companies. The Obama nomination in the US, the Bernanke class speech at Harvard, and Rudd’s call for an Asian union by 2020, project a new future for Australian SMEs.
Kevin Rudd has told the Asia Society AustralAsia Centre in Sydney that he is promoting an Asia-Pacific community that will bring together a diverse range of economies including Australia, China, India, Indonesia and the United States by 2020, which would cover 45% of global GDP.
This would move the globe to the three block world so long predicted by futurists, with a European, Americas and Asian trade framework.
The Futurist believes that we are moving into a very different business environment for smart companies that have positioned themselves to go global by taking on multi-lingual staff who can capitalise on cultural networks to lower their costs of entry.
In this new and emerging future of the business world, the keys to success will be investments in cross-cultural skills development, sustainable prosperity and longer term infrastructure productivity.
Australian firms are well placed to develop the necessary entrepreneurial drive and establish demand-generating enterprises, provided that managers do not succumb to the fear promoting cultures of the short-term market manipulators.
Some years ago a bloke called Nostradamus reckoned that the world of the 21st century would be characterised by three giant trading blocks that would compete for cultural and trading opportunities. Maybe he should be asked to take over my column.
Dr Colin Benjamin is Entrepreneurship and Strategic Thinking Consultant at Marshall Place Associates, which offers a range of strategic thinking tools that open up possibilities for individuals and organisations committed to applying the processes of innovation, creativity and entrepreneurship. Contact: CEO Dr Jane Shelton.
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