With advances in technology, urbanisation and the rapid growth of developing economies, the global economic landscape is constantly changing. For businesses looking to stay ahead of the curve, it is vital to keep up with these trends.
Traditionally, the New Year is a time for reviews and predictions, so here's our snapshot for current business owners, and prospective buyers and sellers, examining the issues and trends set to dominate 2016.
Global and regional mega-trends
Australia's aging population
Demographics reveal that the working age population which has contributed to Australia's prosperity over the last 30 years is now ageing.
According to the Australian Bureau of Statistics (ABS) Australia's population is ageing as a result of sustained low fertility and increasing life expectancy.They state that in the decade between 1994 and 2004:
'The proportion of Australia's population aged 15-64 years remained fairly stable, decreasing from 66.6% to 66.5% of the total population. During the same period, the proportion of people aged 65 years and over increased from 11.8% to 14.7% and the proportion of people aged 85 years and over almost doubled from 1.0% of the total population in 1994 to 1.9% in 2014.’
And over the next decade, this aging population is projected to have several implications for the country, including; health, size of the working-age population, housing and demand for skilled labour.
For the future, this means a reduced worker population supporting a growing body of retired workers. Whilst retirees will be relatively well off, how – and indeed whether – this new capital source affects investment and will, in turn, determine the economic outcomes.
New export markets
With neighbouring Asian economies continuing to emerge and mature, Australia is well placed to capitalise on the development of new export markets, whilst inbound Asian capital may also benefit Australia's education, finance, real estate and similar sectors. At the same time, increased exposure to Asian competition may pose challenges for domestic companies.
As digital technologies continue to shrink the world and facilitate entry to global markets, new opportunities will benefit Australia's existing business community and innovators alike.
In addition, the influence of foreign companies will enhance the vibrance and diversity of Australia's home markets. Building consumer trust in online purchasing will be essential for companies looking to prosper in the digital marketplace.
The flow of global cross-border business capital fell victim to the worldwide financial crisis, and despite considerable improvement shows little sign of returning to former levels. This means capital-exporting opportunities now exist for Australian investors, leading in due course to a healthy range of financial options.
However, failure to respond accompanied by conservative measures could put a brake on investments and returns, and maybe even prompt increased capital importation.
With the world's natural resources becoming scarce, Australia's own diverse resources hold the promise of benefits for mining, agriculture and similar sectors which can thus expect growth. How much growth may depend on innovation and investment, plus an ability to read and react to a sometimes volatile market with confidence.
Business and institutional trends
User friendly data
Data and analysis is not new to business practice, but the shift from packages requiring expert analysis to user-friendly market- and performance data is set to continue.
Accompanying this trend will be an expansion of workforce personnel with data access and less-demanding applications will encourage businesses to develop their own unique reporting and 'storytelling' data functions. Such end-user benefits should translate into improved understanding of markets and better targeting of resources.
Cloud style outsourcing
We could also see growth in the 'cloud style' outsourcing of business data analysis with business intelligence service providers offering sophisticated handling of high data volumes. Such developments would also give smaller companies low-cost access to complex market-analysis facilities.
Counter - trending
Often emerging from intricate market analysis and expected to proliferate in 2015, 'counter-trending' is the identification of specific weaknesses within a rival product or service. Informed by such analysis, a company creates a competing offering which is a targeted improvement of the original in order to gain significant market advantage.
Advanced technological innovation is also utilised by many entrepreneurs looking to enter a market with a distinctive new approach. Where such 'digital disruption' is the result of a genuinely resourceful application of new methodologies, many start-ups have been able to secure generous seed capital, a trend which looks set to accelerate as 2016 approaches.
Social and cultural trends
The use of mobile devices to access online information is once again forecast to increase. This will challenge businesses to rethink their online presence in order to safeguard or improve their market share by ensuring their site interface is attractive to mobile users.
In 2016, these same users are also expected to be keenly aware of their online vulnerability, and companies able to provide a demonstrably secure environment for online transactions will reap the benefit.
Similarly, online shopping will become even more important with more and more companies realising that a convincing online presence is just as essential as physical high street outlets.
In addition, retailers must be aware consumers can now access online sites via an increasing array of smart devices – and be prepared to adapt and respond accordingly.
Meanwhile, social media's ability to formulate opinions will continue unchecked: companies will continue to monitor and manage their online reputation, whilst individuals who continue to innovate are now, for example, finding this a convenient means of securing employment, bolstering consumer rights, and promoting and sustaining diverse health and lifestyle trends.
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