2017 prediction 6 – social disaffection threatens the hyper-globalised ITC market

Figure 6 – Brexit increases the tension between suppliers and governments

Source: ITCandor, 2017

I can’t avoid addressing the changing political and social landscape in my predictions following the UK’s decision to leave the EU and the election of Donald Trump to the US presidency. There is widespread social dissatisfaction with the current political status quo in many other countries as well, so I expect a number of similar surprises as other countries hold presidential (Germany, France, Serbia and Slovenia in Europe) and/or general (Germany, France, Holland, Norway, Albania, Armenia and the Czech Republic…) elections this year. Increased nationalism around the world will pose a real threat to globalisation and its poster child – the ITC industry.

My sixth prediction is that growing business uncertainty and the reduction of the number and scope of free trade zones across the world will impact ITC sales negatively.

Among the changes you should expect are:

• An attempt by individual EU countries to capture more corporation tax, rather than allowing multi-national companies to pay their regional taxes in single countries with lower rates, as the do today.
• Increasing challenges for all sizes of supplier and channel players from the introduction of new tariffs at a country level.
• A worsening of the skills shortages in those countries (such as the US and UK) which set limits on immigration.

Many new restrictions will be added to those already in place, affecting the largest vendors and distributors most. Time will tell whether the iconoclastic messages of political demagogues will result in an actual reversal in the growing disparity in wealth between the ‘haves’ and ‘have nots’. For the first time in generations there are serious challenges to capitalism; perhaps we should study China, which has managed an economic revolution through embracing globalisation without widespread privatisation or democracy.

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