Martin Wolf[1] makes some interesting comments in today’s Financial Times when looking at the ramifications of the current economic crisis. The underlying assumption that this article makes (I believe) is that all the cards are on the table and that therefore we are probably through the worst. I would disagree. This is not just an economic crisis and for that reason we have to wait to see how the world navigates itself through a number of shaping events before we can see the final picture more clearly. One is the outcome of the “57 State Solution” Middle East peace initiative and another relates to the actions emanating from April’s G20 meeting plus of course the mood of September’s next scheduled meeting. I still have a close eye on developments in the banking sector too and the fallout from the GM issue.
He does makes several points that I would agree with:
- The financial sector is past its glory days. As I have said in other entries this leaves real problems for the UK.
- Capitalism will continue but in different forms. My guess is that different models could emerge around possibly 4 aligned blocs – US, UK-Europe, Extended Russia and Asia. This has implications for global trade.
- The shift of power is taking place more quickly than most of us in the west perceive it to be – “The crisis has damaged the prestige of the US in particular … emerging economies, and above all, China are now central players …”
So keep watch those global events. They will probably have a bigger long-term impact on your organisation’s strategy than industry level developments.
But even more importantly, many of the assumptions that we have made in the past now look surprisingly comfortable. We now have to look at the uncomfortable.
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Reference
[1] Wolf, Martin (2009) This is a crisis moment, but may not be a defining one. Financial Times. May 20.