One way or another (and as FSG partner Patrick Marren notes in a recent blog, probably in the eleventh hour), the current impasse between the White House and House Republicans will end. FSG has been thinking about longer-term forces for change that planners need to consider, no matter how the details of the spending and tax deal ultimately play out. No doubt there is enough uncertainty surrounding the impacts of the fiscal measures to keep scenario-planning practitioners focused on their A-Game.
There are multiple economic scenarios that need to be considered. Beginning the process of getting the U.S. economy on a sustainable long-term fiscal footing could be just what firms sitting on piles of cash need to see before undertaking new investments, especially in personnel. But that is not likely to happen before consumers resume spending again. Has household de-leveraging gone far enough? Will consumers have money left in their pockets after new tax rates go into effect to have an appreciable impact on the demand side of the equation?
One area of spending is a given: Along the Northeast coast, where a number of FSG clients were affected by Superstorm Sandy, billions of dollars in public and private spending will be laid out over the coming year to repair infrastructure and housing. FSG partner Peter Kennedy blogs about the moral hazard issues that have arisen around federal flood insurance and decisions about where to rebuild lost structures in an era of uncertain and potentially punishing weather.
Even if everything goes mostly right on the domestic front, there are other, more complex, scenario drivers that could derail the best-laid US policies. The Syrian civil war, the unresolved conflict in Gaza, and a new political crisis in Egypt are flashpoints with the potential to rock global markets.
As a firm of scenario-planning strategists, FSG assumes constant change and eschews the temptation of expert prediction. But this does not keep us from having some fun wondering about how specific goods or services we depend on today will evolve into something totally unrecognizable five or ten years out. In a blog several weeks ago Patrick Marren imagined the Apple iPhone of 2020, which he speculated (humorously but also seriously) would not be a hand-held product at all. Meanwhile, just this week, Business Insider reported that something like computerized glasses is exactly where Apple R&D – and its competition – are aggressively headed.
Ok, back to work. The new monthly labor statistics are due out shortly, and there are just 14 shopping days left until the end of the Mayan Calendar…