Hello everyone and thank you for passing by. Despite being away from the blogging platform for a little while, I have been observing what has happened in the past 6 months. The world is going through some major changes, not only in business but across the social and political spectrums all around the world. I believe this trend will continue in 2018, making the world unstable and unpredictable.
Historically, some type of major change has marked every century. We had the Industrial Revolution in the 18th & 19th Century. Concisely, this is when there was a change from an agrarian and handicraft economy to one dominated by industry and manufacturing. This disrupted the social fabric of many areas where until to this point, agriculture (farming) was the main economic activity for most people. There was a shift from living in rural areas to living in urban ones. It was a period of great innovation and industrialisation which started in Britain and found its way to the Americas. It is during this period that the railroad was built. It brought prosperity to many however at the same time gave grim living conditions to others.
The 20th Century also brought its change and was marked by the two World Wars and the development of technology ranging from space exploration to the majority of people owning a phone containing more technology than the space shuttle that went to the moon.
What does all this mean for present day 2018 and business? I believe what we are living right now is equivalent to the Industrial Revolution. The major difference is that during this period, people changed from working on the farm to working in industries. Today, advancement in Artificial Intelligence and Robotics has eliminated many manufacturing jobs. Many more jobs will be eliminated as driverless trucks and cars become affordable and more accessible. Those job losses were never replaced. The end result is having a large amount of people who need to be retrained into an emerging economic sector. A good example would be the government to invest in retraining people in the renewable energy sectors. However, this is not the case. Instead, you have people who had high paying jobs in changing sectors like the retail industry who are forced to take on 2 to 3 jobs to make ends meet. This is definitely leading to a division of classes, or more specifically the elimination of the middle class.
What is perplexing is that you would think the wealthy and the governments would want to sustain a middle class for the simple reason of their purchasing power. The more the middle class consumes, the more money the governments and the corporations will make. However, that is not what is happening. The middle-class families have less and less disposable income and that has repercussions all across the board. When this is the reality, small business suffers the most. So local mom and pop shops and restaurants have a hard time surviving. Combine this reality with the continuous rise of commercial taxes, it is very difficult for any business owner to make a good living. In my opinion, greed fuels this behaviour. Hopefully this attitude will change in the near future to one of the common good for everyone.
The retail sector is also going through a re-organization. Many retailers are restructuring to face the declining traffic in their brick and mortar stores and the rise of e-commerce. Some are successful like Simons, a Canadian clothing retailer, who is actually opening up new brick and mortar stores, while every other Canadian retailer is downsizing or simply closing like Sears Canada. The malls are also attempting to re-invent themselves due to less traffic. In Montreal, this is evident if you go visit the iconic Place Ville Marie or the Montreal Eaton Centre. They are both going through multi million-dollar renovations in the goal to attract people. Will this work, no one really knows.
What will be the Outcome of 2018
I think we are going through unchartered territory. 2018 will continue with political and social changes as uncertainty always hits a nerve with the majority of people. Change could be very scary, and many people simply do not like it. Well, whether you want it or not change is unavoidable because the current systems in place do not function any more: the stock market is running on pure speculation; people have lost faith in the political systems because they always give the impression that they are corrupt, and they appear to be catering to the wealthy in our society and not to the needs of the majority. The ability to compromise appears to have completely vanish from the political scene. I think if we are able to have a dialogue, be able to compromise and work together to find solutions to important issues like how to save the middle class, the environment and the well being of everyone, the world will be able to move forward.
What about business? Many people are expecting the stock market to continue to correct itself which will translate in the value of the stocks to decline. Despite what central banks and governments are telling us, the economy is not in that great of shape. I would characterize it as being unstable. The household debt is at an all time high in all the G7 countries. The counties themselves are in debt. Despite having some sporadic growth, interest rates will have to remain the way they are or will have to be lowered. Banks do not want to be stuck with many reprocessed properties. At the same time, low interest rates do not help retirement funds. So, with an aging population about to go on retirement, and with the possibility of a stock market decline, it will be interesting to see how the central banks are going to handle the situation.
In summary, 2018 will be filled with changes and challenges. As you can see the issues are quite complex and are intertwined across the business, political and social spectrum. We will all have to adapt to a new way of proceeding, a new way of doing things. Despite the world being unstable and unpredictable, I am hopeful the changes will bring new opportunities and a better way of life for everyone. I guess I am an optimist, but I think it is the correct mindset to have during times of change.
Thank you for taking the time to read my Editorial. Please do not be shy, I want to hear from you. What are your thoughts for business in 2018? You can reach me by email, Facebook or Twitter.
Until next time, keep on smiling!!!!!