The year 2019 is focused on political stability, sustainability and economic impact. We, as individuals, employees and corporate leaders each have a stake in the game.
Our Growth View column is split in 2 parts – first (1) we will discuss how change, requires investors and corporates to focus on their comparative advantage and adapt their business models. Second (2) the benefit of transparency, to identify gains that can be achieved through pareto-efficiency.
With the Nigerian Presidential elections in February, candidates and the electorate aspire for prosperity and inclusive economic growth. Despite the talks on equity markets tumbling, mergers in Tech & TelCos and the uncertainty with debt and political reforms; the question is, what do we, as individuals and companies, have to look forward to in 2019?
Change is a topic that most people are afraid of.
We intrinsically fear it and it is engraved in our mindset at a young age. Social and behavioural economics reflect this. Where, uncertainty can drive frantic investments. In both markets and politics, the unknown will drive quick actions and irrational decision-making in large volumes – where people jump on the “bandwagon”.
Why don’t we position the “bandwagon’ positively, towards sustainable investments and social impact? Impact investment is the next “digital era” where politicians, companies and individuals are adapting and setting a high value on education, health, poverty reduction and our environment. This is reflected in business models and products put on the market, in Nigeria as well as globally.
‘On a positive angle, change also opens our mindsets to new business strategies, innovation, and allows us to reflect on fresh ideas that leaders put forward.’
FinTech investments are increasing for example, to improve access to finance in rural and poor communities in Sub-Saharan Africa (SSA). On the same token, investors also see the value of micro-lending and market-entry financing. It is a win/win both for undeserved communities and those providing working capital at a lower cost. This micro-lending is dedicated to sectors that will attract a high volume of customers. Investors and start-ups are making the most of this market change, they aim to decrease the number (#) of middle-men in the value chain and take control of trades patterns to lower corruption and costs. Volume is the market changer
As discussed in the previous Growth View, values drive change. We see a convergence among societies and markets that aspire for prosperity and equity. And volumes are speaking. This year, the decision-making power is being handed to people. Banks and companies are introducing impact business models. So how can we make the most of this market trend and investment direction?
Motivation is critical in times of economic risk. We tend to let go and not be pro-active in our quarterly or yearly strategy, we prefer to wait as we don’t believe we can predict outcomes.
Our societies wait for the political results and the markets to drive themselves, taking a “laissez-faire” approach. In our current landscape, this may be with Brexit, Trump China-trade negotiations or the Nigerian presidential elections. We also tend to borrow moreand spend rather than save and keep our cash for the effective long-term investment. What is the cost of lending? What is the return I expect? Do I truly know how the landscape will change in 2019? It is key to be pro-active.
FinTech firms are developing algorithms to predict legal outcomes, and even to include political variables (despite how difficult they are to incorporate quantitatively); into their overall performance calculations.
“Why don’t corporates start developing, various predictiveimpact models into their business strategy and product development, to ensure sustainability?”
What about developing impact scenarios, on a company level? Make your business model at an SME and MSME level a pro-active strategy, with various scenarios based on potential outcomes.What is the value of having predictive scenarios?
GrowthView offers the clear RAS model. These variables have various weights, based on our priorities and growth targets. This will be covered in Part 2 of this column.
- Risk | minimise your risk, and you also broaden your perspective on the political or economic change.
- Adaptability |It allows youto adapt effectively to the change. Be ready sub-consciously and pro-active when the time comes.
- Sustainability | It also gives you the opportunity, to integrate sustainability early on into your business model, without having to pay the cost at a later stage.
Now, to help be forward-looking and have a cohesive vision, below are3 reflections on building a sustainable business model that will give you a comparative advantage in the long-term.
- Keeping steady and knowing your strengths is a strategy both as an individual and as a corporate, helps weed out the chaos around us. Knowing your strength is also knowing your comparative advantage in the market. Particularly across the 17 SDGs, where does your strength in capacity but also in agility lie?
- Agility is then the next stage in corporate or SME growth, being talented at adapting, either as an individual or as a company is what allows a growth shift to be catalysed. By setting different scenarios and predictive analytics, you will set yourself apart in the dialogue of sustainability efficiently.
- Absorbing information and sharing knowledge transparently, as we enter the new year. Companies and markets reflect innovative movements. Keeping eyes and ears open, as leaders share more information and conferences are increasingly taking place. Be aware of the trends.
Our choices and decisions as individuals, combined with our values is what will drive impact and change in our economies – locally, as well as internationally.
Christina Wehbe
