ECONOMIC FORUM STRESSES MOVING FORWARD OR FALLING BEHIND
By David Zaslawsky
Photography by Robert Fouts
When the final speaker at the 32nd Economic Forum wrapped up his presentation, he told his audience of businesspeople to go out and fail.
Failing in the 21st century is a whole lot different than when the U.S. was an agrarian society and failure meant family members would go hungry or possibly starve to death.
“Now, we’re in a world with enormous volatility,” Adam Davidson said at the forum held at Wynlakes Golf & Country Club. He said that meant “we’re going to fail a lot.” He encouraged the forum participants to understand failure; harness failure; and embrace failure.
Davidson, co-founder and co-host on “Planet Money,” which airs on National Public Radio, said that many products fail in the marketplace and ones that succeed cause others to fail.
“Failure and innovation are synonyms,” Davidson said. “Innovation is always talked about as a good thing, but innovation hurts – innovation is dangerous. Innovation is the flip-side of failure.”
Innovation is a complex process and, that to be successful, cannot be left in the mind of one person, according to Don Amoroso, a professor of information systems at Auburn University at Montgomery and the Lowder-Weil Endowed Chair of Innovation and
Strategy. He insists that all areas of a corporation be represented in a board to oversee innovation projects.
Amoroso gave a detailed presentation of taking a company from point A to point B and after studying successful firms overseas, he concluded that innovation must contain: visioning, comparative strategy analysis, ecosystem analysis, blue ocean strategy, portfolio management, innovation boards and investment and risk taking.
The blue ocean strategy enables a company to “think long term and think about where we are not now and where we need to go,” Amoroso said.
He said before developing an innovation project, a company must know where they are today and what companies are part of the ecosystem, which includes “all the industry players that contribute to the whole picture,” Amoroso said, referring to suppliers, manufacturers and customers.
Lt. Gen. Steven Kwast, commander and president of Air University at Maxwell Air Force Base, issued dire warnings about the failure to innovate – both for the military and companies.
“We are still a nation languishing in industrial models and systems and organizations, yet the world has migrated to an information age world in ways that are going to impact all of us,” said Kwast, who became the Air University commander and president in early November. “Those people that have the vision to understand what that means – the vision to be able grasp the business opportunities of that – will dominate the future and I want it to be America.”
Kwast said that to survive in the future, “I’ve got to be fast and innovative.” The Air Force is changing its corporate processes because “it’s insufficient,” Kwast said. He said it’s his job “to help unleash the brain trust of Air University and all these bright people and partner with you (public and private sectors) in a way that can help us.
“We will be dead in the water as a military if we don’t start being part of the conversation. We need you as much as you need us,” he told the audience. “We will give you our facilities; and our people; and our thinking; and we will give you insight into our problems.”
Kwast foresees a future where Montgomery is a focal point for cyber technology – where the Air Force, the information technology sector, commercial sector and colleges and universities collaborate.
“What I’m interested in doing is creating something that’s special; something that has a purpose,” Kwast said. “ … if we do this right, anybody in this nation who needs somebody to innovate rapidly turns to the River Region and says, ‘Here you go.’ ”
Boyd Stephens, co-founder of Revolution MGM, has been instrumental along with Adam Warnke in bringing tech entrepreneurs together. He talked about tech startup communities, which Stephens said need three things – ideas, talent and money – all in abundance in the I-85 corridor between Auburn-Opelika and Montgomery.
Revolution MGM is “about bringing all of that talent; all of those ideas; all of those concepts together within this region,” Stephens said at the economic forum.
The key is getting buy-in from the entrepreneurs, Stephens said, and acceptance from those outside the tech startup community. Most of those in the tech startup community are millennials, who may dress differently and work differently than other employees from traditional businesses.
Innovation has had a dramatic impact on the automotive industry, with vehicles that now contain 50 microprocessors, said Dennis Cuneo, who operates DC Strategic Advisors and is a site selection consultant. “The automotive industry is quickly changing from a mechanical base to a software base; from a transportation focus to a technology focus,” Cuneo said. He said that software and electronics account for 40 percent of a vehicle’s value.
One firm predicts there will be 15 million self-driving vehicles by 2035 and a majority of all vehicles will be self-driving by 2050. Those vehicles will reduce traffic fatalities by 85 percent.
If you don’t believe that self-driving vehicles are the wave of the future – consider this: Google is involved in the process.0
FINANCIAL EXPERT PRDICTS DOLLAR REMAINS STRONG
By David Zaslawsky
Photo by Robert Fouts
A strong dollar is great news for Americans traveling overseas, but it’s not such great news for U.S. companies that send products and services overseas.
Those products and services sent overseas have become more expensive for consumers in Europe and Japan and it has become much cheaper for foreign companies selling products and services in the U.S.
The implications are worrisome. When the cost of automotive production in the U.S. increases 10 percent or more for Japanese and German automakers, the companies are less likely to expand. The good news for Montgomery is that the Korean currency has declined only slightly, which means that operations at the Hyundai plant in Montgomery and the Kia plant in nearby West Point, Georgia, are not in jeopardy, according to Ernie Ankrim. Ankrim, principal at Ankrim Strategic Insight, spent 19 years at Russell Investments, including six as chief investment officer.
He told the 32nd annual Economic Forum at Wynlakes Golf & Country Club that the European Union is buying U.S. debt and has now passed China. That capital infusion will be used to acquire U.S. companies, Ankrim said. “I wouldn’t be surprised to see French and German firms buying up pharmaceuticals and other industrials – especially things that can be easily transferred over borders,” Ankrim said.
His forecast for European economies is continued weak growth and more banks under stress. The Euro will be kept low “to stimulate the economy through export activity.”
He did provide an answer for the question on the mind of all investors: The Federal Reserve will raise interest rates the middle of the year or later. His concern is how the Fed manages a return to normalcy – how to bring $2.7 trillion back into the system without causing inflation and without spiking interest rates, which would “stifle growth and the economy and hurt employment. They (Fed) may be able to pull this off.”