A Forward Look to 2017
- December 21, 2016
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The election is finally behind us, but many American business leaders still feel that uncertainty lies ahead in the coming year. In Pearson Partners’ Q4 2016 Spotlight SeriesSM breakfast discussion, we asked a panel of legal, business and economic experts to share their thoughts on changes we might see in 2017 and beyond. Our esteemed panelists included:
- Robert A. Estrada, Senior Managing Director, Dallas, Estrada Hinojosa & Company, Inc.
- Maribess Miller, Retired Partner, PricewaterhouseCoopers; Member of Board of Directors for Midmark, Triumph Bancorp, Golden Seeds Fund LP and Zix Corporation
- Meredith Walker, Principal and Chief Economist, MMW Research; Board of Councilors, EastWest Institute; Member, Business Executives for National Security
- Renee Arrington, Moderator, Pearson Partners International
Below is a summary of our panelists’ comments.
Buckle Up: Change Is Coming
As we enter 2017 and prepare for the inauguration of a new president, our panelists agree that there is one thing we can all expect: Change.
President-elect Trump’s chosen cabinet members will need to be cleared and approved by Congress before they can get to work, and all eyes will be on that process as it begins to take place. Meanwhile, whether or not Trump follows through on his campaign promises will have a tremendous impact on American business.
In boardrooms across America, directors are gearing up for a blistering pace of change, not just from the government but from the convergence of multiple disrupting factors.
Expect more disruptive technological innovation, followed by new levels of regulation to govern use of those new technologies. Innovation will increase competition, which will also disrupt existing models of distribution and business. Boards are also expecting disruptive investors, who are chasing new technology, pushing for growth and driving mergers and acquisitions.
Another disruptor will come from Trump’s promises to overhaul laws and regulations. Boards would be wise to invest time now in scenario planning, taking into account potential changes in taxes and repatriation. Companies that succeed will be those with agile teams adept at managing rapid change, who can tap and analyze Big Data to keep pace.
Affordable Care Act
With Trump’s promise to dismantle and replace the Affordable Care Act, big changes are coming to American health care. Hospitals and other health care organizations have already made sweeping changes to their business models to accommodate the ACA, in many cases forming new affiliations with each other. Insurers have spent years and millions of dollars adapting their business models to the ACA. Dramatic change will not be easy or fast.
While much remains uncertain, our panelists predict expanded use of health savings accounts, more pricing transparency, expansion of Medicare’s ability to negotiate drug prices, possible sale of insurance across state lines and conversion of federal Medicaid to block grants.
In light of Trump’s recent interaction with Taiwan, our nation’s relationship with China has become a subject of much discussion.
China has set a goal to beat the United States in business by 2049. Faced with strong competition, American businesses may feel the call to ramp up innovation. At the same time, the U.S. government must carefully navigate the relationship to send the message that international law must be respected as our two nations work together to move forward. Here in Texas, many businesses benefit from a positive trade relationship with China and are hoping that as U.S.-China relations are recalibrated, it is done respectfully and correctly.
After an attempted coup in Turkey, which the Turkish government perceived as an attack on its democracy, Turkey was disappointed that the U.S. did not immediately provide condolences or aid. Because Turkey is rising economically and serves as the last bulwark on the border with the chaotic Middle East and Europe, this relationship will likely also need more focus during the coming years.
Our nation’s relationship with our neighbor to the south, Mexico, has been relatively stable and somewhat taken for granted. With immigration reform looming, this is another international relationship that could soon take more of the spotlight. The question of whether “the wall” will be built is still unanswered, and many are hoping for the leaders of both countries to come together to discuss other ways to resolve both nations’ immigration woes.
The American stock market is surging—at least for now—and the American economy has continued its slow upward climb. Yet, the European Union continues to work through Brexit and all of its repercussions, creating a drag on growth in our interconnected global economy.
While no one can predict what the new year has in store, watch for experts and analysts to present a range of potential scenarios as the headlines continue to break. Business leaders must pay close attention to policy announcements, news, analysis and market trends, constantly evaluating and assessing their impact and responding quickly. The year 2017 is shaping up to be one marked by uncertainty and volatility, calling upon businesses to respond with agility, flexibility and speed.
Pearson Partners Spotlight SeriesSM Breakfast
Save the date for our next Spotlight SeriesSM breakfast scheduled for March 7. Look for details and invitations in February. Did you miss one of our Spotlight SeriesSM events? Check out summaries of past events.