Many predictions were wrong.
That’s according to Ruchir Sharma, the chief global strategist at Morgan Stanley Investment Management in a recent New York Times column. He was referring to a variety of economic and political predictions made about 2017, from how the global economy would struggle, to the rise of right-wing nationalism. None of it happened. It’s what he calls the weakness of “straight-line” thinking. It’s the fault line in consensus “group think” which always misses “big turns.”
What big turns (or small ones) will we have to contend with in 2018? Here’s our list. These aren’t predictions. But as a global communications consultancy, working with clients across multiple sectors and media markets, we know that we’ll run into most of them, if not all, at some point.
The World Economy Hums Along, at a Price
The fact is the world’s major economies are doing very well thank-you-very-much. Short of political disruption, they should continue to. What we’ve seen in our global work is that all boats are rising on this tide: more and more companies, small to large, are launching global growth initiatives. We have one client in the renewable energy generation and management space that has a handful of people, but a global footprint that spans five continents.
What’s the price? Inflation, of course, which means interest rates will continue to tick up. Already wages are rising. Then oil prices will increase. I doubt we’ll see another “commodity super-cycle,” but expect everything to become more expensive. We don’t think this will hamper the global ambitions of organizations. In the early years, rising inflation is like a wave; a lot of corporations will catch it, but then it crests and crashes.
Trump’s new tax law will do more than any other action by any other government to spur growth, inflation and rates. But also, to ultimately balloon the U.S. budget deficit. Markets will anticipate this, so expect the dollar to rise versus other major currencies. Just bracket the fact that no other top 10 developed economy in the world has had to cut taxes this much, and for the wealthiest, in order to spur economic growth. This will all, in 2018, stimulate global growth, and further lift the tide, which will be good for cross-border businesses and globalization. At the same time, it will bring home for Trump’s base of voters the reality that he has always been more interested in the interests of the top 1 percent of owners than of working people.
Organizations across sectors are being challenged like never before to take a close, hard look at whether they’re paying enough attention to what’s going on within their walls. Formal policies and procedures to prevent sexual harassment have obviously failed, miserably, across the board. It’s not about policing adherence to those policies (although clearly many companies did not) as it is about modeling the right behaviors, top to bottom.
The other issue here is whether people believe that their employers are acting “justly.” We say that not in legal terms. But few things will undermine confidence in an organization than the belief, among employees, that management’s interests were superior to those of everyone else. And to protect management’s misbehaviors, it is willing to turn a blind eye to sexual harassment, or to sweep it under the rug as fast as it can.
Our view about the ultimate impact of the #MeToo movement is that it will task organizations to: a) be brave in ways that they haven’t had to, perhaps ever, which means dealing with sexual harassment wherever it happens, especially from the top down but anywhere in the organization; and b) be more fully transparent and forthcoming with their employees. After all, sunlight is the best disinfectant.
The Future of Innovation
Innovation happens all around us, every day. Probably the most misunderstood leading edge of innovation today are cryptocurrencies. We launched a digital currency, or “token,” last year in 12 global media markets. What we learned from the experience is that, as William Goldman once famously said about the movie business, “no one knows anything.” Goldman was referring to what’s required to make a guaranteed successful movie. The relevance to cryptocurrencies is striking: no one yet knows what all the ingredients and conditions will be for a digital currency to be successful.
That’s because it’s the early days in the cryptocurrency world. Forget about Bitcoin and Ether. Most early entrants in the innovation sweepstakes fail (do you remember Pets.com?). More important than the next new digital currency to hit the market is more participation in this “space” by a larger number and type of organizations, not to mention a regulatory framework. This will bring best practices and more stability. But also, some wreckage as this new, emerging sector finds its footing.
Our Communications Lens
This will be a particularly challenging year, if for no other reason than that for every positive development coming this year there will be a soft underbelly of risk.
Expanding economies will eventually hit a wall if prices spiral out of control.
The #MeToo movement is only starting and organizations will have to find their bravery and transparency fast before long festering disclosures surface.
Innovators are always the future, but innovation untempered often damages far more than it creates.
Recalling Ruchir Sharma’s comments, it is difficult to predict what 2018 has in store. The big turns in 2017 will continue to rumble onwards, and no doubt there will be a few new surprises too. As communicators, we will need to keep our eyes open to the risks, and be quick to adapt to whatever bumps in the road lie ahead.
All the best,
Montieth M. Illingworth
January 8, 2018
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