Prediction 2019: Rise Of A New World Order – Opportunities & Challenges

Prediction 2019: Rise Of A New World Order – Opportunities & Challenges

1. Introduction

Have you ever noticed that behind a US one dollar bill, there’s an image of a broken pyramid?

The Latin phrase beneath the image is “Novus Ordo Seclorum”.

Most people, including Americans do not know what those words mean.

The Latin phrase is loosely translated as “A New Order of the Ages”.

After the devastations of World War 1 and 2, many key initiatives were launched.

For example, development of the Bretton Woods System and growth of international agencies such as the International Monetary Fund, United Nations, World Bank, UNESCO created a more conducive economic environment and put the world on a growth path.

These initiatives lifted millions out of poverty and we generally enjoyed world peace for more than seven decades.

In recent years, we are witnessing an unprecedented convergence and crash of megashifts such as globalization, geopolitical influences, advance technology, diverse cultures, and “Trumponics” (whatever that means).

In the process, we are seeing the making of a new world order.

These and many other tectonic plates are shaping a new world and influencing our future.

The purpose of my paper is to share with you some of the salient megatrends that will impact entrepreneurs and investors and how they can respond to these trends and capitalize on the resulting opportunities.

2.Tectonic Plates Shaping A New World Order

2.1 The first megashift which has been hogging our headlines in recent times is the US-China Trade War.

Hopefully, it’ll never ever lead to a Cold War.

Because when elephants make love or go to war, small but beautiful little plants like Singapore may be affected.

In my humble opinion, the US-China Trade War is more than just a trade war.

It’s a battle for global geopolitical influence and a struggle for technological supremacy.

To understand the US-China Trade War, we need to analyze its root causes.

Study many of the reasons behind the trade disagreements, tensions and conflicts.

One of the main causes is the huge and growing US trade deficit with China.

The US trade deficit with China was US$375 billion in 2017.

The US exports to China were only US$130 billion whereas imports from China were US$506 billion.

The US is also leveraging on its advantages to force China to further open its doors for trade and commerce.

Make the necessary economic reform for trade liberalization.

Case in point, the Chinese government’s “Made in China 2025” seek to achieve 70 per cent of “self sufficiency” in replacing key imported component parts, especially parts that are used in advanced technology.

As it is, the Chinese Government is legislating the need for MNCs to share detailed information of sensitive technology, including source codes with local partners/authorities.

There is an overarching reason for the US-China Trade War.

There is an undercurrent for dominating global geopolitical influence.

President Xi Jinping shared his 2050 vision at the 19th Chinese Communist Party’s (CCP) Congress on 18 October 2017.

The two-stage goal was to make China the top innovative nation in terms of inventing and developing advanced technology by 2035.

And to be a country with global influence by 2050.

Any US political leader worth his salt would be suspicious of China’s 2050 vision.

Recent events seem to indicate that the EU, China, Australia and some Asian countries view the US as a lesser evil.

When push comes to shove, they may close ranks with the US.

President Xi Jinping or any member of the Politburo Standing Committee would not have a good night sleep on the prospect of facing an alliance of some of the most developed nations.

For Trump, he may just lose an election. But for the Chinese, they may lose another era of progress and be “shamed for a thousand years.”

My concern is that there may be a possibility of miscalculation and misfire in the ensuing US-China Trade War.

The tit-for-tat responses may also cause the world to take a more cautious approach in economic activity and adopt a more protectionist position.

These initiatives will affect the US, China and other countries.

The OECD, World Bank and IMF have generally predicted a slowdown in global economy.

2.2 The second megashift is Advanced Technology.

Enough has been said about how advanced technology – known and unknown – can disrupt, devalue, and displace every job, career, business and organization.

How then should you respond to advanced technology?

2.3 The third megashift is the economy.

There are a few key indicators closely.

After the global economic crisis, we have enjoyed a low interest rate environment.

It has allowed us to enjoy relatively low cost of funds, invest in infrastructures development, and enhance economic and business activities.

The US Federal Reserves has been increasing the interest rates.

The last increase caused our stock market and many other stock markets to react and dip sharply.

Fed officials are projecting to increase interest rates three times in 2019 and one more in 2020.

Those of you who have outstanding bank loans for your business or any investment may wish to engage your bankers.

Refinance your loan and fixed the interest rates at least for the near future.

The other concern is the potential increase in oil prices.

Increase in oil prices will generally increase inflationary rates, increase business costs, and reduce economic activities and growth.

2.4 The fourth megashift is globalization.

Globalization is a two-edged sword.

Globalization has promoted a more open trading environment.

It has also improved economies of both developed as well as developing countries.

Many poor countries have benefited from foreign direct investments, technology transfer, and a more open trading market.

Competition has improved efficiency and promoted greater innovation.

From a sociocultural perspective, there is stronger understanding between and among nations, and increased engagements and exchanges.

It has helped to promote better bondings and bridges between cultures and communities.

Unfortunately, globalization has many downsides.

For example, it has increased the Gini coefficient in many economies.

The rich is generally getting richer and the poor is getting poorer.

And income gap is getting wider not only in Singapore but also in many countries.

Many workers are being exploited and abused.

Climatic condition and the environment have also suffered because of unfettered industrial developments.

Many workers have lost their jobs or run the risks of losing their jobs to workers from lesser developed countries.

Hence, we are seeing the rise of many leaders riding on the crest of populism, including Donald Trump, Viktor Orban in Hungary, Jeremy Corbyn in the UK, Matteo Salvini in Italy, Heinz-Christian Strache in Austria, Marine Le Pen in France, Alexander Gauland in Germany, Rodrigo Duterte in the Philippines, and Tun Mahathir in Malaysia.

The roots of the problem is not globalization.

Key stakeholders from the political, public, private and business sectors are not doing enough to help workers upgrade themselves, adapt to the new environment, and leverage on opportunities in the global economy.

These megashifts are causing what’s commonly termed as a volatile, uncertain, complex and ambiguous or VUCA environment.

In such an environment, we are feeling tensions between two extremely opposite polarities.

Will geopolitical influences lead to a unipolar or bipolar world, or a multipolar world?

Will these megashifts cause global economy to become more volatile or will it catalyze another era of growth?

Will advanced technology caused major disruptions or contribute towards major empowerments?

Will the world be drawn towards nationalism and nativism, or multilateralism and alliances?

Doomsday prophets, mud-slingers, and naysayers are having a field day.

Many are predicting another financial crisis in the near future.

How then should you respond to such a VUCA environment?

3. Global Megatrends: Then How Should You Respond?

Typically, there are 6 different responses.

In our company, we term these responses as the 6 Fs.

They are float, flee, flip-flop, freeze, fear or fight in the face of unpredictability and uncertainty.

To make matters worse, some are prone to respond as a result of fear or foolish greed.

Fear and greed are the twin terrors in the business and investment world.

Moving forward, it bodes well to remember that unpredictability is not an enemy.

Uncertainty is not a foe.

They are not necessarily pitfalls.

In fact, megashifts can become platforms to strengthen your business, investment, and ROI.

Entrepreneurs and investors can thrive on complexities, controversies and complications.

Fight and take flight even in challenging times.

Leverage on changing times to generate stable, secure and sustainable profits, advantages and growth.

The two questions to ask yourself are:

What are tomorrow’s problems that you can start to resolve from today?

What are tomorrow’s opportunities that you can start to capitalize upon from today?

4. Global Megatrends: Leveraging Changes for Growth

Looking back on my business life, some of the best times for learning, improving, and getting better results are during hard times.

Some of the best times to generate increased profits, improve businesses, and achieve quantum leaps of results are also during hard times.

Why?

4.1 In a VUCA environment, there’ll always be silver linings.

There will be new needs, wants, requirements, dissatisfactions, niches, gaps, imbalances, dissatisfactions and improvisations that cannot be fulfilled or be adequately fulfilled by current businesses and industries.

By value-adding to these gaps, you can develop more stable, secure and sustainable outcomes, results and contributions.

4.2 Even if disruptive technology affects your business, there’ll be new markets, businesses, niches, and other opportunities that are being created as a result of the disruption.

These opportunities may even be more meaningful, rewarding and fulfilling.

4.3 During a downturn, it’s also a good time to redesign your business model, revitalize your talents, and reengineer your operation to prepare for an upturn.

4.4 During every economic and business downturn, there’ll be knee-jerk responses and overreactions in the business and investment markets.

There’ll be under-valued assets to be acquired that will yield positive gains for mid-to long-term investors.

Looking back, I acquired some of the best companies, properties and other investments during unpredictable and uncertain times.

1. Global Megatrends: Responding to Technology for Growth

In recent times, one of the biggest concerns is technological disruption.

How should you respond to technological disruption?

Historically, every major change, challenge and conflict has put an end to long-held positions, powers, possessions, practices, and other preferences.

The Industrial Age redeployed humans and animals for other purposes and pursuits.

Similarly, the Information Age created new breakthroughs that allow us to scale up and step up to a higher plane.

In the past, the advent of computers and other technologies saw many prophets of doom predicting the death knell of conventional businesses and business practices.

And painted many doomsday scenarios.

While it’s true that a lot of businesses collapsed by the wayside, there were many others that were transformed to become stronger and better.

The workforce has not become irrelevant and replaced because of improved opportunities, value-additions, outcomes, results and impacts.

Every new age has created new opportunities and possibilities.

New models, structures, systems, technologies and processes have been developed to improve effectiveness, efficiency and efficacy.

The workforce has generally been repositioned, re-skilled and retooled to be deployed for new tasks, jobs, careers, industries, businesses, and markets.

Through it all, we have also witnessed eradication of poverty like never before and generated unprecedented prosperity.

Through the power of advanced machines and technology, we have the power to create accelerated and scalable solutions, and make the world a better home.

Whatever the case, there’ll be those who will complain about the darkness while others will light up a candle to lead them out of darkness.

5.1 Look Out For Gaps

Disruptive forces, including robots, drones, Internet of Things, artificial intelligence-driven devices and other innovations may be able to take over many jobs and businesses.

However, they may not be able to fully perform all the tasks, including tasks that revolve around leadership, abstract thinking, aesthetic, emotive, personalised, and persuasion factors.

Therefore, develop and leverage on intelligences that these disruptive forces may not have, including moral intelligence, metacognitive and fluid intelligence, creative and innovative intelligence, entrepreneurial and financial intelligence, intrapersonal and interpersonal intelligence, and intelligence for leveraging technology.

5.2 Study what advanced machines cannot do or cannot do as well as humans, or what they can do better together with humans.

Find niches that you can influence, and be a net contributor to them.

Adapt to and capitalize on every new situation through ever-improving attitude, knowledge and behavior.

Proactively identify gaps that cannot be fulfilled or be adequately fulfilled by disruptive forces and value-add on these gaps.

5.3 Provide outstanding customer service by integrating the best of technology and heart-warming services.

The combination and synergy of “high tech and high touch” will position you to stay ahead of the crowd.

5.4 Look at how to leverage the best of what’s called OIO services.

Synergize online and offline services to win customers’ trust, respect, affection and loyalty.

5.5 For every business and operation that is being disrupted, be mindful that new jobs and opportunities will be created.

For instance, while technology can generate information, there’s still a need to make sense of the volume, variety and velocity of information generated.

The new opportunities that are being created as a result of disruption may have higher value-additions and these value-additions can be even more lucrative and fulfilling.

5.6 For entrepreneurs, the economic slowdown is one of the best of times to redesign and fine-tune business models to improve productivity, increase market shares, and strengthen bottom lines.

This is as good a time as any to improve your operation and prepare for an upturn.

5.6 Look out for incentives from the government to help entrepreneurs grow and globalize their businesses.

The authorities will continue to invest in developing the 23 Industry Transformation Maps (ITMs) to grow our future economy.

5.7 In a challenging environment, there’ll be increasing demand for bonds and asset-backed investments.

Singapore will become more appealing as a safe haven.

Many foreign investors and high net worth individuals may hedge value of their assets and arbitrage foreign currency movements and invest in selected assets for mid- to long-term gains.

There will be good buys in the business, investment and property markets.

1. Global Megatrends: The Twelve Hats of CEOs

How then can you be a winner in the new economy?

In our company, we propose what we call the “Twelve Hats of CEOs.”

You need to learn to put on one of the hats or a combination of different hats to survive and succeed in the new economy.

These disciplines, knowledge and skills that are required for each of these hats are mutually reinforcing.

The greatest economic boom in history will happen in the Asia Pacific region.

Singapore and our neighbouring countries can reap some of the biggest returns.

Are you ready for the boom?

1. Conclusion

We are at an inflection point in the history of humankind.

The shelf life of your business model and competitive differential is shortening.

What has worked in the past will no longer work in the future.

If you keep moving in the same direction, you will always reach the same destination.

To reach a desired destination, you need to change your direction, improve an existing pathway, or create new pathways.

While you cannot predict and prevent changes and disruptions, it does not mean that you have to resign yourself to apathy, passiveness and complacency.

You can prepare yourself to be future-ready and be operationally-ready to capitalize on the megashifts in the Fourth Wave.

Proactively develop an effective mindset, model, culture, operation and condition.

Learn new ideas, business practices, and competencies.

Discipline ourselves to let go of the past in order to build a better future.

In doing so, you can pioneer, respond to, and leverage on changes to propel yourself to the next level of growth.

Throughout your business journey, creatively destroy your current business model.

Reinvent and reinvigorate a new business model so as to run your business in a better, faster and cheaper way.

The focus is not to respond to every challenge but to build a resilient model that will rise above every situation.

Establish an adaptable organisation with an able and agile team to capitalise on winds of change.

Be forewarned: If you don’t change the changes around and within you for the better, these changes may eventually change you for the worse.

Go4It!

I hope this message will find a place in your heart.

By the way, I have also recorded other reflections.

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