Throughout the last year, four economic trends emerged that impacted both the small entrepreneurial businesses and large corporations employing thousands. For a business to be successful, it is important for a business to adopt strategies that maximize operations in light of trends. This establishes longevity for the company as both practices and products are remain relative and demanded by consumers, partners, and investors. The year 2019 raised many concerns about moving forward into new areas of growth or development, but learning from past trends will give a company an edge in facing the changing economic landscape.
1. Global Trading Conflicts
The past year has highlighted the instability of the current presidential administration and trade relationships with countries across the globe. The most noted and watched interaction occurred between the U.S. and China, with each country taking aim at the other through tariffs and import restrictions. The political power struggle between these countries impacts how trade works around the world, and it involves more than just the flow of goods. There is a growing concern with the devaluations of currency tactics that China employs against the U.S. will create problems with other currencies, as well as the threat of counterfeit product sales from pirated information and data theft that will weaken a company’s ability to sell their own product. China isn’t the only global threat to the economy, but the response of the U.S. and countries around the world to this and other concerns may continue to impact global growth.
2. Economic Down-turn
Across the globe, there is a continued expectation of reduced economic expansion. However, when looking at the gross domestic product growth of individual countries, there are some experiencing above-average growth rates, while others are facing a down-turn with economic growth slowing down. There are many factors impacting individual country growth, such as capitalizing on tech or software developments, major financial investment opportunities, and even tourism. However, the threat of trade conflicts, the unrest over the unease of the power of the EU, and financial crises such as the bailout Greece received years ago may continue to have countries pulling back on their global involvement with trade.
3. Unease with the European Union
After intense debate, heated opinions, and highly-contested reasoning, the people of the United Kingdom voted to abandon their membership in the European Union. While there were many who thought an additional referendum would be presented in the ninth hour to reconsider the move, the transition is well underway. With one of the economic heavyweights no longer at the helm, the remaining countries the comprise the EU have considerable less economic and political power. The challenges associated with Brexit rest with the trading agreements and financial valuation of the UK with the remaining countries within the EU. The financial sector has a right to be concerned, as institutions like GBTI Bank have to worry about the financial stability and fiscal policies of Italy as well as the reforms that France claims are in the works. The UK has been a sort of glue for the EU, and the remaining countries have to quickly develop a cohesive approach to finance, trade, and political power in order to promote or at the very least, sustain economic growth across Europe.
4. Digital and Tech Transformations
There is hardly any area of industry where digital transformation has not had a significant impact. Companies that want to remain relevant to the changing economic conditions must quickly move to integrate innovative developments in digital tech. This isn’t just a need for leading economic power players, as third world countries have been given a seat at the economic table through accessibility to the rest of the world through internet connectivity and digital transactions. Another area of tech impacting global trade is the use of artificial intelligence. Although it is revolutionizing areas of data analytics, production, and efficiency, there are those who fear that automation will replace the human workforce and create long-term damage to economies around the world. Though machines operated by AI can improve many industrial applications, the overarching themes are to eliminate the use of human labor for repetitive, simplistic tasks, shifting a dependency on human touch for more complex projects.
There is also an increased reliance on high-speed mobile connectivity and internet expansion across the globe to improve areas of trade, financial, and medical infrastructure. The newest tech in mobile devices is the 5G rollout, with many countries already jumping onboard in 2019 for their mobile communication needs. However, it will still be another year or more before companies that aren’t a part of the communications industry are able to incorporate the benefits of faster data speeds.
Companies looking to stay profitable in the coming years would do well to study the emerging trade and economic trends on both a local and global level. The stronger the economic growth within each country, the better the global economy will fare.