Suck it up folks, life is going to remain tough for the financial industry for the foreseeable future. But the smart ones have some amazing opportunities, if they don't blow it.
Those were among the big messages at the IMCA 2014 Annual Conference
being hosted from May 4 to May 7th at the Hynes Convention Center
More than 1,700 high net worth advisors, fundsters and other financial professionals are meeting to talk about the future of the profession, gossip, do deals and presumably eat some of the city's world class seafood.
The conference started off with a general session speech by Princeton University professor Alan Blinder about restoring confidence in the markets (hint: relax and take a deep breath) followed by a reception hosted my Thornburg Investment Management
in the exhibit hall.
The conference kicked off at full swing Monday with a loaded schedule of speeches, workshops and presentations.
One notable session was the early morning presentation by international economist Dr. Dambisa Moyo.
Moyo, who has visited 70 countries and writes about macroeconomics and global affairs, warned about the short-term challenges democracies face in a speech titled Geopolitics of Emerging Markets and the Global Economy
Her message was relatively straightforward. Policy makers in many countries are less confident in the merits of globalization, and of democratic free markets, than they were a decade ago.
Why? Recently, democratic free market policies haven't had the greatest track record. Developed countries during the period between 1980 to 2007 grew a lot slower than developing countries, and cross border commerce is equivalent to what it was ten years ago.
For example, Moyo noted that the U.S and Europe represent some 12 percent of the world's population, roughly 50 percent of the gross domestic product, and 90 percent of the welfare.
Moreover, the top six employers in the world are governments. Walmart comes in at seventh.
Less democratic regimes, such as China, Taiwan and Chile, have witnessed eye-popping growth over the past decade, leading many policy makers around the world to question whether they need to adopt Western-style policies to grow their economies.
In fact, Moyo argued, many leaders are considering government controlled surges in order to kick start their economies and job growth.
For many of these countries, economic growth and wealth creation are life-or-death issues. Moyo cited academic figures indicating that countries with per capita incomes of less than $2,000 per year usually have low survival rates for their governments, i.e. democratic regimes tend to last only a couple of years before poverty-fueled instability leads to a change. Only countries with average incomes above $6,000 per year have any hope of instability.
As a result, businesses should expect to see more protectionist policies across the globe for the foreseeable future. Firms will need to be more flexible and more local in their thinking, and more willing to cannibalize failing outposts to support those that are thriving.
Moyo said that there will indeed be opportunities for investment and commerce, but American executives will need, again, to adapt their paradigms of thinking. For example, they will have to come to terms with the reality that Chinese-models of commerce and business, at least for the near-term, will be more prevalent and that they will have to develop some level of comfort dealing with these models.
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