You can almost hear the solemn mantra from finance directors repeated across boardrooms in America and Europe: cut costs, freeze headcount, stop new investment, avoid risk, don't explore growth regions or industries, sit tight and wait for the storm to pass.
Zip up now while the bad news oozes from the Eurozone and the bottomless US deficit pit. Don't wait for the train crash.
But this storm won't pass. This is not a biz cycle trough.
Finance directors who believe this to be another trough of yet another business cycle which will track back to expansion, may be in for the rudest shock of their tidy lives.
What we are witnessing is the collapse of the old economic order. It is the rough end of a steady shift of economic weight from West to East. The tipping point is being reached.
What follows will be unfamiliar and destabilizing. From creditor nations, the developed economies are changing into debtor nations. Credit will get tight. Businesses will find it harder to survive.
But developed economies still have substantial strengths to leverage: innovation, creativity, new technologies, research etc.
As domestic unemployment rises and consumer confidence wanes, consumer capacity will shrink in Europe and the USA. Domestic markets will consolidate, leaving the fittest companies to survive. Market Darwinism will kill off the sick, the lame and the weak.
The best time for smart leaders to break from the pack!
There cannot be a more favourable moment for shrewd businesses to exploit niche leadership, disrupt competition in home markets and find new markets and growth sectors in Asia and Africa.
Mobile communications has leap-frogged the dysfunctional wired telecommunications infrastructure of government monopolies in emerging economies.
Lucrative 2G & 3G wireless spectrum sales has incentivized governments to privatize mobile communications and bandwidth. The competitive energy unleashed has seen prices for handsets become affordable to even farmers and fishermen.
The mobile revolution has put all consumers on a platform of connectedness. There are tremendous opportunities to fill voids in information, products, services, education, money-transfers etc which were not available on such a scale pre-mobile.
The emerging markets are resource-rich in minerals, land and manpower. Rapidly growing consumer power is driving demand for basic products and services.
Companies in mature markets have so many options to find new opportunities beyond their borders if they have the leadership to work profitably and productively with local talent in emerging economies.
The worst option now is to sit still. Get out there and stake your ground in emerging economies while you can. Go to the future.
ENDS
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