The 2017 CSIA Executive Conference last week did not disappoint, as CSIA fan favorite Alan Beaulieu, principal at ITR Economics, was the first speaker on the agenda. Beaulieu is known as one of the country’s most informed economists. For years, CSIA conference attendees have relied on Beaulieu’s pristine track record for accurate economic intelligence and actionable suggestions to reduce risk and drive profitable business decisions.
Beaulieu asserts that the next 12 years will be remembered as the ‘good ole’ days’, and then we are on track for a ‘great depression’ in 2030. The audience of control system integrator business owners and executives were delivered great news regarding the US manufacturing industry they serve. “The world is your oyster,” was the optimistic message Beaulieu conveyed.
Robotics, lean manufacturing, lean engineering, digitalization, Industrial Internet of Things IIoT, and the many additional advances in technology and efficiency are all contributing to US manufacturing strength. In fact, on the 2016 Global Competitiveness Index, we rank #2 just behind China and by 2020 we are predicted to be #1 (See chart).
Beaulieu went on to point out that the rest of the world is betting their money on the US economy as shown by the graph illustrating US Total Foreign Direct Investment.
For the immediate future, Beaulieu is forecasting economic expansion to continue in 2017 and 2018 followed by a mild recession in 2019. He emphasized that the growth we have already seen in the first quarter of 2017 is foundational, not political, which means this growth is reliable. During 2017 and 2018 you need to hold on to your money to take advantage of investing in 2019. In 2018 you need to be building your pipeline to carry you through the mild recession in 2019. While other businesses are suffering during the recession, you will be in a position to invest and grow your market share to take advantage of the comeback in 2020.
Think differently about growth. “A lot of integrators try to do too much,” said Beaulieu. The key is to differentiate your company so you are not a commodity. This will allow you to raise your prices to earn more money while the economy is strong. The only way to do that is through creative, smart marketing to build a strong competitive advantage. Beaulieu drove home his point saying, “It’s amazing to me how many companies treat marketing like a ‘nice to have’, rather than a ‘need to have’.”
Beaulieu also cautioned the audience, “We are in the midst of a transformative technological shift – adapt or die.” Digitalization and Industry 4.0/IIoT are the driving forces behind the shift.
Here is a list of some of Beaulieu’s recommendations and/or observations:
- Focus on creating a strong niche area of expertise.
- Invest in marketing your unique value proposition.
- Make sure your employee training and retention programs are top-notch.
- Rethink millennial employees and how to be flexible to attract and retain them.
- Drive efficiencies with technology.
- Plan for higher wages.
- Food & Beverage industry is growing.
- Chemical/Ag industry show negative growth, but predicted to grow in the second half.
- US Pharma is in a decline trend, if you sell to this market it will be key to show how you can save them money through greater efficiencies to lessen their pain.
- Oil & Gas industry will slow until we have a bump in price.
- US Renewable Energy Consumption is way up and will continue to grow – consider finding a way to be part of it.
- Interest rates are predicted to go up twice in the next year.
- The US dollar is strengthening which will slow down exports.
- Immigration is important to continue our economic growth.
- Free trade and fair trade is necessary to grow the economy.
- Protectionism will hurt the economy and be bad for the country.
If you are ready to differentiate your company and plan a marketing strategy, we can help.
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