‘Tis the time of predictions for the New Year. So here’s one from TimelessTime.
What matters in business is confidence. Confidence that next year’s turnover and profits will be at least what they were in 2013. Confidence drives investment. If a manager feels there’s a 90% chance that 2014 will be at least as good as 2013, he or she will borrow to invest. That 90% depends of course on the manager’s attitude to risk.
Investment fuels growth, however we define that. So it could be growth in capability or in skills or just growth to sustain the current business position in presence of external pressures like competition. Growth gives prosperity. Prosperity is the ultimate human goal.
So what gives us confidence about 2014?
Maybe it’s that we warm to Bank of England governor Mark Carney. He seems in no hurry to increase interest rates in light of our fairly static inflation rate of 2.1%. Or maybe it’s that the GDP, that measure of our economic activity, is up, and forecast to rise again in 2014. Or maybe that it’s that unemployment fell yet again to reach 7.4%.
Confidence is a state of being. It’s a human attitude that is built substantially from past experience and the recent past experience is good. So here’s a prediction on the basis of experience from 2013: there will be a steady but slow improvement in our prosperity in 2014 over that enjoyed in 2013.
But here’s an appeal too. Luck is the inverse of risk. Luck is that bit of the future that isn’t so certain. Sometimes one has to create luck by taking a bit more risk than usual. So go on! Make that investment now.