Identifying Opportunities in Economic & Regulatory Trends

Assignment 6A: Identifying Opportunities in Economic & Regulatory Trends

1)      Opportunity #1: Trade Wars accelerating exports of countries not involved, boosting their economies.

Opportunity #2: Increased Consumer Spending for 2020

Opportunity #3: Changes in bank regulations to reflect technological advances

Opportunity #4: Regulations in 2020- New Ways The Government Will Affect Your Business

2)      Opportunity #1:

A.    I found this article on https://finance.yahoo.com/news/2020-outlook-worlds-economy-top-144500057.html. I came across this article when looking for economic trends that would impact the global market in 2020. I believe trade wars, which were a prominent part of global economy in 2020, provide a great opportunity for countries not involved to boost their economies. In 2019, trade wars sparked all over the world, especially between the United States and countries like North Korea. The result was increased exports from countries such as Canada that saw a rise in their economy. Trade wars create an embargo on goods, meaning countries that are placed under restrictions are under financial and social strain, making them more vulnerable to outside trade partners. Due to a deficiency of a particular good, the country with the embargo is more willing to negotiate or even pay extra for a certain commodity. If countries found a way to capitalize on trade wars, their economies may see a surge because of an increase in exports.

B.     Particular information in the article that leads me to believe that this opportunity exists is its mention of Brexit and countries in Southeast Asia. As countries like the UK become more distant from their conventional trade partners in the EU, they will be looking for new ways to get commodities. Countries like the U.S. and Canada can thoroughly benefit from this. The UK will become extremely reliant on other countries outside the EU for products, meaning that countries can exploit this opportunity and increase their exports. The article also mentions that America and China’s motion to ceasefire their trade war will benefit both economies going forward. This motion to stop comes after sanctions were placed by both countries, ultimately benefitting countries like Canada that were able to increase their exports because of the trade war. So I believe countries that exploit trade wars, and separatist movements like Brexit, will see growth in their economy.

C.     I believe the “prototypical customer” for this opportunity is any country outside of a major trade war or separatist movement.

D.    I think while this opportunity can have the potential for some countries to see great economic growth, it could be hard to exploit. For one, once a trade war happens and an embargo is enforced, many rivaling countries will be trying to sell the same commodities to the country in need. In addition, if certain goods aren’t essential, the government of those countries with the embargo may ban those products all together. Domestic production of goods is also a threat for those that want to exploit this opportunity and increase exports.

3)      I believe I was able to see this opportunity because I understand that when there is a shortage, there is going to be an increase in demand and desperation. If certain goods, known to be only produced and imported from a certain region, stop coming into a country people will be looking to get these products from somewhere else. If the country with an embargo does not have the resources to domestically manufacture this product, the exports for another country with the ability to make the same product could skyrocket. Someone may look at this and not see any opportunity because of the competing forces at play and what-if scenarios, but at times of desperation people could look elsewhere and be willing to pay extra.

2) Opportunity 2:

A. I found this article on https://www.vistage.com/research-center/business-financials/economic-trends/20191209-economic-trends-impacting-business-in-2020-and-beyond/. According to the article, consumer spending accounts for 70% of the U.S.’s GDP. As the state of the economy becomes extremely unpredictable due to it being an election year, this consumer spending needs to continue to increase or stay at a high rate in order to maintain our economic balance. All indicators point towards this trend. Interest rates are set to remain low, and commercialism and online shopping have all pointed to this occurring. This rise in consumer spending could be a major opportunity for businesses and organizations looking to grow and promote their products.

B. Information given in the article about how consumer spending is expected to go up nationally, because of the measures in place, leads me to believe that this opportunity exists. As the article alludes to, because of the relative stability of the economy in terms of interest rates, taxes, income and employment, consumer spending is set to remain on par, if not increase in 2020. The article even states that in countries like Britain with uncertain financial security because of Brexit, consumer spending has remained at a high. This means that even in countries waning in their faith in the economy, consumers are still spending. Not only does this provide an opportunity for economic growth domestically, but it could also mean a global trend towards increased consumerism. This would have positive implications for businesses, manufacturers and governments all over the world. The opportunity for exploiting the rise in consumership exists globally. People now, more than ever are more likely to purchase a product because of connection due to the internet and increased standard of living.

C. The prototypical customer for this opportunity is any consumer looking to purchase a product or service.

D. I don’t think this opportunity is very hard to exploit at the moment. In this global market, people are ready to spend and as long as a commodity becomes relatively popular it will be purchased by many. With the internet and global reach these days, it has become easier than ever for businesses to access consumers. While businesses may be able to exploit this opportunity, they must also face increased competition on the global market.

3) While many people may look at this article and not see an opportunity because there has been a rise in consumerism over the past couple of decades, I can see an opportunity because people are spending at an astronomical rate in some areas of the world. On top of that, the standard of living and financial security people have now makes them more likely to spend. As the article mentions, even in countries with distress and economic instability, people are continuing to spend. This increase in consumership provides a great opportunity for businesses to exploit all over the world.

2) Opportunity #3:

A. While I was looking for regulatory trends for 2020, I came across this article that described the necessity for innovative methods that tie bank security and expansion together going forward. I found this article on https://www.ey.com/en_us/banking-capital-markets/four-major-themes-dominating-the-regulatory-landscape-in-2020.

B. I believe an opportunity exists because banks are continuing to keep interest rates low, to encourage loans and consumership. Despite this, they face a period of “re-scoping and evaluation.” Over the past few years, technological advances have made online banking and transactions even more prevalent. Banks need to adapt to these technological shifts and advances, while protecting consumers and preserving their systemic stability. As regulators debate how to accomplish this, business owners and industry heads have a real opportunity to shift policy in their favor as banks make this transition.

C. The prototypical customer for this opportunity would be the public. If business owners and industry heads are able to shift bank regulations to favor them in the future, they would be able to provide more products/services to the market for consumer purchase.

D. While it remains ambiguous as to which way banks will swing, in terms of increasing or decreasing regulations on corporations, I think the opportunity to sway policy towards favoring businesses exists. As the article mentions, with more technological advances than ever before and new systems of money management, banks need to be on top of this change and shift their regulatory policies to reflect this new era. If business heads are able to influence policy it could benefit them in terms of getting loans, having nominal interest rates and better renewal plans.

3) While I see this as a major opportunity for industry and businesses, others may not because this transition for banks has been in the works for several years and may still take a long time to get accomplished. Also other competitors that favor a small market and individualistic organizations may influence bank policy going forward. Despite this, I do think industry and big businesses have more convincing power and can shift policy to promote their agenda, as banks try to find a new regulatory policy to reflect innovations and technological progress.

2) Opportunity #4

A. As I was searching for ways in which government regulations would affect businesses in 2020, I came by this article on https://www.forbes.com/sites/waynerash/2019/12/19/regulation-in-2020--new-ways-the-government-will-affect-your-business/#683f36263f23.

B. According to the article, going forward in 2020, new government regulations have the potential to impact big businesses in a major way. In particular, the 3 sectors that will be of focus are privacy, security and 5G security. Tech companies and businesses like major airlines have an opportunity to create new security measures to enhance consumer support. These days everything is digitalized and hotels/airlines/hospitals all have a tremendous amount of information about an individual. Protecting this information will not only increase consumer support for that company, but mean that the consumer will most likely purchase from the company again and tell their friends about it.

C. I think the prototypical consumer for this opportunity are people who want to purchase a product or service, but want to protect their identity and financial details from hackers.

D. This opportunity may be difficult to exploit because in today’s day and age nearly everything is electronic. Data from people’s social security number to credit card information is recorded online and can be made accessible by those on the internet. Many hackers and companies specifically targeted at obtaining personal information about individuals exist.  Cyber security is key in gaining consumer confidence in 2020. Companies that can figure out how to increase trust in their brand, will see growth.

3) I see this as an opportunity because nobody wants their data hacked, or financial details stolen. Every time you give out personal information to purchase a product or service, you do so in the hope that your information will remain private. If there are constant breaches and security threats to a company, you are less likely to engage with that company and will look elsewhere. Thus I think finding ways to enhance cyber security according to government regulations will help businesses grow and expand.