2017 & Challenges It Will Bring To CEOs Of SMEs

For the past couple of months i've been leafing through all kinds of articles that put forward their view of what 2017 will bring. Most of these have revolved around technology trends, economic and political uncertainty.

Digesting all of this has been quite a task and certainly the gist of this is that there is a distinct lack of optimism for 2017. With President Trump now in place and already showing his propensity to bring division in his own society and giving clear signals that he aims to try to roll back globalisation , in so far as America is concerned, as well as the forthcoming coming Brexit divorce proceedings , coupled with elections in Holland, Germany and France this year, which are likely to see insurgent anti-EU candidates do well, the picture looks increasingly gloomy.

For many CEOs out there, like myself, leading small organisations, we're left wondering whether this period of likely upheaval will affect our business and in what way. Most will harbour hopes that being small , would mean the surface area of our companies' exposure, will be minimal. 

This might have applied ten years ago, but the fact is , even SMEs have changed significantly in the past few years. Whilst many people see globalisation as perhaps a negative thing, meaning job losses and transfers to places like China and the Far East of manufacturing jobs as well as increased competition in our domestic markets - globalisation has transformed CEOs thinking in that we have become more outward looking and "globalised" in our thinking. Today , my own company which is a mere 6 years old and employs less than 20 people, has carried out work in no less than 7 countries and this constitutes a key part of our business strategy.

So how is the counter-globalisation revolution likely to play out for SMEs ?

My intuition and instinct is traditionally based on a statement I recall one of Barack Obama's advisors made when he was elected in 2008 at the height of the financial crisis. "Never waste a good crisis" - there are bound to be opportunities out there for smart companies that ignore the doom and gloom. That said, 2017 seems to be loaded with quite a few risks for those of us leading businesses.

Certainly for those of us operating or trading with the UK, there are likely to be some shocks in store - devaluation of the pound which will likely occur as the UK seeks to improve competitivity and to stop the haemorrhage of businesses leaving the UK, possibly combined with stringent immigration processes.

The latter may impact the current ease with which we travel to the UK. If there is an eventual tarriff barrier raised on products and services , our cost advantage will be eroded.

Conversely will Brexit create opportunities as a result of capital and business outflows from the UK to our own economies?

I'm far from being an expert in this field, but rumours abound that the likes Eire will be a major beneficiary of such flows. Some financial institutions seem intent on migrating to mainland Europe. One would tend to think that there might be some of those flows landing elsewhere , including Malta , but there have been no clear signs of this thus far.

But back to Trump, his unilateralism and transactional approach to dealing with Europe and further afield such as China and Russia , is likely to trigger responses and it remains to be seen where this will take us. His behaviour thus far has not augured well that he is equipped to navigate the roads of diplomacy.

More worrying in my book, for SMEs across Europe and closer to home here in Malta, is what will happen with regards to the elections in France and Holland - I might hazard that Germany will remain a bastion of stability despite the likely rise of the  AFD party but France and Holland are two completely different cases. Geert Wilders seems to be leading in the polls and is a direct threat to not only the Euro , but also to the EU. The same can be said about Marine Le Pen. If these two bring about the demise of the EU, SMEs will feel the impact much quicker than our cousins the large corporations as market cohesion and ease of access gets eroded.

So in a nutshell, my take as a CEO of an SME is to closely follow developments and continually adjust your strategies and approach as the inevitable economic landscape evolves. The net uncertainty factor is clearly not healthy for us, but its still my belief that the growth we've enjoyed for the past decade, can continue if we carefully consider our plans and strategies in the light of such events. Simply burying our head in the sand and hoping that this is going to pass us by is not an option.