Risks and opportunities in 2017

January 3, 2017

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By Robert McCutcheon, Partner, US Industrial Products Leader

This past year was marked with significant disruption and unprecedented change. In the middle of the year, the global marketplace was surprised with Brexit, the result of a vote for the UK to exit the EU. Then, in November, the US was met with its own surprise, to some, with an unprecedented presidential election. So what is in store for 2017? Uncertainty.

However, we need to remember that with change comes risk, as well as opportunity.

A few weeks ago, I penned my thoughts on the top-five issues on the minds of manufacturers in a post-election environment. Continuing on that theme, our ongoing discussions with clients and our own efforts to evaluate the impact suggest that tax reform and regulatory change will quickly surface as the top two issues having the greatest potential impact. While trade matters were a close third, the debate about our path forward will be more controversial. Unlike tax and regulatory reform where the broader business community feels change, trade policy could result in a greater debate between potential winners and losers.

The outcome of the 2016 election was a surprise to some and, as a result, many companies had not taken the time to plan for this event. Notwithstanding, it remains important to look beyond campaign rhetoric to assess more likely outcomes, and then monitor developments closely over the coming months. Is this the next wave of a US manufacturing resurgence? We certainly can’t expect to see business as usual over the next four years.

In the midst of all this uncertainty, disruptive technology will continue to be top-of-mind for US manufacturers. There are opportunities for those who are proactive disruptors and risks for those who find themselves being disrupted. What manufacturers are realizing is that data will be the new raw material. The company that can best harness the power of data and monetize it through innovative solutions and new business models will capture the greatest share of market. As industries transform, the next generation of talent expects their industry or company to evolve from being a producer of a product to a provider of solutions. Those that are digitally enabled, leveraging technology, data and analytics, will emerge the winners.

The new year will be met with a period of uncertainty – market volatility, fluctuations in basic materials, etc. But the bright spot is that we’re witnessing renewed GDP growth and the beginning of a digital transformation. We’ll have to see how this all plays out – continue to follow our conversations here as we bring you timely updates on what we’re seeing in the domestic manufacturing industry.

 

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