Stuff Happens - Lets Get On With It

If we look back over the last half century no-one predicted the discovery of penicillin. This has had a dramatic, positive impact on our population growth. No-one predicted the huge inflation of the 1970s after the Vietnam War or the fall of communism in the 1980s. September 11 and the subsequent Global Financial Crisis (“GFC”) were unpredicted events, the response to which has reshaped global geo-politics. So what are just a few things we need to look out for going forward?

Volatility: According to Morgan Stanley executive director, Arnaud Mares, in reference to government debt “The question is not whether they will renege on their promises, but rather upon which of their promises they will renege, and what form this default will take.” If this prediction of global governments default on debt proves to be correct then our financial markets will be buffeted even more than they were by the GFC with inflation and energy costs also adversely effected. Globally, government’s response to the crisis has already seen significantly increased volatility. With publicly acceptable solutions difficult, there is no question that volatility - both economic and political - is here to stay. We need to adapt to a far more volatile world and focus much more on risk management, in both our personal and business lives.

Shift from West to East: Those economies who have over indulged in debt over the last couple of decades simply have to take a drop in standard of living. Those that lived within their means are growing. As a result of this, we are seeing a massive shift of power from West to East as empires decline and others rise. China is moving back its preeminent global position that it gave up a few centuries ago, followed by India. And with a large emerging middle class, there is a big shift from starch to protein, so in that the trend is our friend. So how are we adapting our education and research systems to this trend?

Demographic Changes: These are driven by three key issues – globally more people, more people living much longer, and for some - more mobility. The metrics are phenomenal. Within and between countries there are significant changes as some populations age and decline while others grow. Along with ethnic and significant family structure changes, demographics will impact significantly both the demand and supply side of economies. For us it means we have to compete for talent and skills, to retain our youth, and to adapt our export product and service offering to a predictable changing human makeup.

Ideological Change: We seem to be moving from a global division on the basis of “democracy vs. communism” or “left vs. right” to one more based around religion or other religious type movements, as people search for meaning in different ways. Coupled with demographic change, we need to adapt our strategy to reflect changing values and preferences. The discussion is moving.

The unpredictable: Looking forward, there may be an unpredicted war , assassination or terrorist attack that will again change the course of history as the 28 June 1914 assignation of Archduke Franz Ferdinand of Austria, and September 11 USA attack did.

There will likely be a significant disease, either human or animal – just as we have had AIDS and bird flu. There will continue to be some very significant weather events – just because there always has been for a few million years now - the weather is the weather, not some innate object that doesn’t change shape, or that you can regulate.

There will be an invention, or a discovery that will have a profound impact on how we live, work, play and do business. Broadband, the internet and the digital revolution have already had an impact. In my view it has seen one of the most phenomenal changes in centuries - consumers have gone from being readers to writers. They talk back, they upload, and they let everyone know what they think.

This makes the supply chain far more responsive and creates significant opportunities. It allows for more questioning of scientific and political opinion, challenges traditional information relationships between parents and children, and the traditional media and society.

With multibillion dollar projects such as The Square Kilometre Array and The Large Hendron Collider, like the space race in the latter half of last century, you can be sure there will be spin offs into everyday personal and business life.

People and their attitudes matter. As individuals, an agricultural sector and country we need to focus on solutions, not just the problems. Stuff happens – we need to think much more about risk, manage it, stay positive, be innovative and just get on with the job.

CONOR ENGLISH
CHIEF EXECUTIVE

Federated Farmers of New Zealand