by Claire Aiken
As we look ahead to new and emerging business opportunities and challenges in 2018 its worth remembering that all forecasts come with a health warning, especially where politics and economics are involved. Back 9 years ago, in the aftermath of the financial collapse of 2008 on a visit to the London School of Economics and with a second Great Depression looming, the Queen asked a simple but devastating question: why did nobody see it coming?
While we are all confident that the economy across Great Britain and the island of Ireland is in a different place than it was then, 2017 has reminded us that politics – that cocktail of people, policy and power – will always be somewhat volatile.
Watching a review of 2017 on BBC’s Newsnight last week, I was struck by political commentator Deborah Mattinson’s unease as she was reminded of her prediction of Jeremy Corbyn’s demise on the same show a year earlier. Few if any foresaw Labour’s resurgent performance in last year’s general election with political correspondent Tom Peck, summing up the prevailing wind predicting that Corbyn “will lead Labour to electoral oblivion. Of that there is no doubt.”
Yet, predictions of Theresa May’s immediate demise were also overplayed. Her estranged former colleague George Osborne might yet be right when stating it was a matter of ‘how long she remains on death row’ but nobody’s beating down the door to take the poison Brexit chalice from her grasp. And despite his personal achievement in 2017 Jeremy Corbyn’s Labour is not landing the Brexit punches, its more Tory backbenchers such as Dominic Grieve.
As for business influences in 2018 whether its island of Ireland or UK, there is little getting away from the execution of the Brexit process. Companies continue to hold off on investments to see how the process will effect trade relations. Head of Enterprise Ireland, Julie Sinnamon, warned last week of uncertainty and volatility in the months ahead as negotiations unfold adding that ‘there still is not enough focus by Irish companies in terms of preparing for Brexit.’
As a micro economy heavily dependent on East West & North South trading that threat is more widely felt in Northern Ireland and not helped by the biggest squeeze on living standards in generations and a slowdown in job creation, with local political uncertainty adding insult to injury.
The big acid test, and of paramount importance, for the local economy across the island is of course Theresa May’s commitment in phase 2 of no hard border and the assurance that the default position provides.
The end of March is the timeline for a framework deal on the terms of transition to exit the EU. If that deadline is missed, businesses may be forced to make decisions that could have negative consequences for jobs and investment. Any economic slowdown would have knock on effects as the UK government tackles a range of long standing challenges including the introduction of universal credit, investment in the NHS and social care. Skills shortages cost £90bn each year with the government also under pressure to invest in an area vital to advancing economic prosperity and unhinged by the onslaught of Brexit.
With rising inflation and Brexit looming, forward business planning may become more difficult. Businesses will need to ensure that they remain flexible & efficient to ride out any temporary swings in consumer confidence. This drive for increased efficiency will also encourage further investments in automation and AI.
2017 was a year which also saw some bruising developments for the gig economy, with a number of issues within the corporation–meets–self–employment sector. In particular, the sectors approach to full benefits and securities of full–time and part–time workers came increasingly under the spotlight. 2018 will shape how these companies and their employees fare.
Crypto currency technologies could also make an impact this year changing the way business is done on a daily basis. From introducing improved security and authentication in contracts and supply chains, to creating better peer–to–peer business networks across energy, retail, and more, crypto currencies influence will grow.
Several high–profile data protection cases came to the forefront in 2017 and the threat of cybercrime is now perhaps the single largest risk for all businesses, both large and small. With criminals developing ever more complex methods to gain access and control of systems, businesses are beginning to invest more in their defences. In 2018 businesses will need to see increased spending in IT systems infrastructure and upgrades, staff training and the use of security experts.
Also, businesses should look out for General Data Protection Regulation set to be enforced from 25 May 2018. Businesses will need to ensure that they have all their data processes and policies in place to meet more stringent requirements. The threat of significant fines for non–compliance will add to the pressure for businesses to be ready for May.
In the wake of recent scandals corporate culture, business ethics and rebuilding trust in business are likely to be at the heart of many public policy and regulatory developments in 2018 and beyond.
More broadly the big trends of world affairs seem set to carry on into 2018. China is getting stronger and more assertive. The West is fragmenting. The population of Africa and the Middle East is growing so rapidly that it is the main threat to the stability of Europe. In western politics, the rise of populism and nationalism continues, driven by discontent with immigration, inequality and the decline of the steady career. The idea of globalisation is being challenged and in different parts of the world there are polarising shifts in how countries want to operate.
Like politics the nature, emphasis and needs of business continually changes, and with those changes come opportunities. JFK said, ‘change is the law of life and those who look to the past or present are certain to miss the future’. No better strapline as a new year for business beckons.