At the start of a new year, it is natural for people to look ahead to the coming 12 months and assess what may be in store for themselves and their businesses. This includes looking at the wider economy and, for businesses that trade internationally, considering factors such as the ease of doing business and likely changes in possible terms of trade.
In January 2023, the economic picture is certainly mixed. While the World Bank expects the global economy to just about avoid recession this year, several major economies, including the UK, are likely to shrink.
Meanwhile, inflation looks set to remain high in the first part of the year before it starts to slowly fall back.
But how do IOE&IT members view the year ahead?
Richard Finney runs the gentlemen’s grooming “emporium” Captain Fawcett. The self-styled “moustache meister” remains hopeful that 2023 brings a smoother path through red tape. To be fair, he knows this is based more on optimism than expectation.
“We have high-quality product, keen customers and plenty of demand. But, although Captain Fawcett is always ready and willing to respond with alacrity, our can-do attitude is often frustrated by interminable form-filling, checks and new bureaucracy.
“We’re all still grappling with the post-Brexit way of working. In 2023, I trust new processes will stabilise and become faster for all concerned. Naturally, establishing trade deals with new and emerging territories is also on the Captain Fawcett radar,
both for the company and, as a proud ‘Export Champion’, for fellow businesses in the East of England and across the UK.”
The year of digital-first trade?
Frederic Jean-Baptiste, global trade advisory, freight forwarding & customs clearance, at Customs & Freight, is pinning his hopes for the easing of bureaucracy on a swifter implementation of digital solutions:
“I’m hopeful international trade keeps accelerating its transition towards digitalisation, as a solution to reduce the cost and increase the efficiency of international operations in the mid to long-term. The industry needs to embrace technology to mitigate
headwinds such as high energy prices, rising interest rates, sustained inflation in many economies, and negative global economic spill overs from the war in Ukraine,
Jean-Baptiste says that in 2023 he intends to become more fluent in the technology and software language. “I believe that despite the fact it will always be a people business, international trade is increasingly becoming a software business.”
Better international relations
Sylwia Niemowna-Baginska is an economist based in Northern Ireland and an IOE&IT student member. She says she would like this year to be one of rebuilding trade relations with our neighbours.
“Trade is based on reciprocity and the best possible relations with neighbouring countries. This results in savings on transport costs and shortens supply chains. This has a mutual benefit. Currently, there is a trend for reversing globalization and a strong demand for specialization. This requires reforms in education and investment in the most important resource of all - human resources.”
Finney agrees, pointing to the importance of in-country, local knowledge, which he says is vital for building culturally sensitive relationships. “As such, we’ll be collaborating more than ever with our esteemed distributors, consulting their expertise
and working hard to cement opportunities with new distributors in fresh, and as yet unexplored territories.”
One way to enhance this cultural understanding is through education, which also leads to better problem-solving skills.
As Niemowna-Baginska explains, “I have a strong need to improve and learn new things, which can lead to a completely different perspective. When you learn new things you can come to new conclusions, improve problem solving and make difficult decisions
flexibly. Education is a process that never ends and makes us act proactively and better able to adapt to change.”
Concerns for 2023
As well as looking for opportunities, it is natural that IOE&IT members should also consider potential challenges and concerns for the year ahead.
Finney points to what he describes as the “somewhat difficult global economic headwinds and rapidly increasing cost of raw materials, which continue to be rather a headache”.
He adds that his firm is doing all it can to keep prices down, even as costs escalate: “We strive to give customers reassurance that our prices will remain stable, but it is challenging with so many unpredictable global factors at play.
Nonetheless, Captain Fawcett will carry on ‘Keeping A Stiff Upper Lip Regardless’®”
For his part, Jean-Baptiste points to the pressure any downturn might place on the push for net zero.
“I am concerned about the negative effect of a global recession on the capacity of the industry to maintain the pace of the transition towards net-zero. Despite the government’s efforts, I am afraid that in an adverse economic environment, the importance
of achieving sustainability goals might become an objective of lesser importance for international traders.”
Niemowna-Baginska also highlights the tendency for isolationism and protectionism in international trade as a cause for worry in 2023,
“I am concerned about the tendency to isolate the economy as a result of the post-Brexit, post-covid situation. Investing in education and spreading awareness in society of the importance of entrepreneurship, production and trade motivates people to take
risks and create added value. Despite the huge losses and costs, the stimulation of employment and professional activity are indispensable in the process of reconstruction and improvement of economic conditions.”