The Future of Industry: Sector Convergence & 2017 Outlook
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The document discusses sector convergence and industry disruption, emphasizing the impact of technological transformation and regulatory changes under the Trump administration. It highlights the need for businesses to innovate, adapt their business models, and form new partnerships in response to an evolving marketplace. Specific sectors like manufacturing, real estate, not-for-profit, and energy are explored regarding how they are adjusting to these shifts and the uncertain regulatory landscape ahead.
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The Future of Industry: Sector Convergence & 2017 Outlook
- 1. The Future of Industry: Sector Convergence & 2017 Outlook February 1, 2017
- 2. Sector Convergence | Industry Disruption and Redefinition Trump Administration Impact on Industries, Tax, Regulation Technology Transformation | Digital Innovation Fourth Industrial Revolution: Convergence of AI, IA and IoT Risks and Growth in an Uncertain Environment Nichole Jordan National Managing Partner Clients, Markets and Industries @NicholeJordan26 www.linkedin.com/in/nicholeajordan The Future of Industries Series
- 3. How should companies respond to the challenges and opportunities presented by this disruption? Questions to consider… 1. How are you investing in your future? 2. Are you developing new alliances across your business to keep pace with the changes? 3. How are you creating your revenue streams of the future? How are you avoiding commoditization of your business? 4. Are you setting up a separate company to innovate and support new ideas? 5. Do you have an outcomes focused business model or a products focused model?
- 5. Convergence Information Technology, Media and Telecommunications Blurring of the traditional lines among Tech sectors and other industries • Driven by technological change and, in some cases, deregulation • Yet, the principal driver is still entrepreneurial creativity • Convergence at the device level • Convergence among and across the sectors of the Technology Industry • And increasingly the blurring of industry lines • Digital goods transformation is well along • Sharing economy - Transportation, Lodging • Competition with traditional industries – Automotive, Industrial Learn more about The State of Information Technology Steve Perkins National Managing Director Technology Industry @StevePerkinsGT www.linkedin.com/in/steven-perkins-56332211
- 6. Convergence Manufacturing Advanced manufacturing technologies transform the landscape • Internet of Things, sensors and big data – are creating connected products • Impact on the business model: John Deere moves from product business model to hybrid business model using data from connected devices to create profitable services to help farmers improve yield • GE Energy will be using drones to sniff for methane gas emissions at well sites. The drones will have customized software to develop a flight path and analyze the captured data line. Jeff French National Managing Partner Consumer & Industrial Products @jfrenchgt www.linkedin.com/in/jefffrench1
- 7. Convergence Manufacturing Automotive companies become software companies? • "Whether the car companies like it or not their industry is becoming a tech industry. Virtually all powerful tech companies are in a race to see who can provide the best solutions for autonomous driving, in-car entertainment, and even propulsion." – IT World • Ford seeks, much like Facebook or Twitter, to integrate its products into its customers’ lives • Bill Ford - “Now he worries—what if we only made more cars? Just making more cars is not our future." They are making "computers on wheels" – Forbes Magazine • When we moved from horses and buggies to cars there was a massive purge of firms that just didn’t want to change fast enough – IT World Learn more about The State of Manufacturing
- 8. Convergence Real estate Innovation fueled by technology and changing needs of customers push convergence into real estate sectors • Hotels: The "alternative accommodation model" Air Bnb. The decline during 2016 in the number of compression nights at U.S. hotels could indicate a threat from alternative accommodation providers. • Restaurants: Online meal delivery kits, Blue Apron – rise of "grocerants" grocery stores that provide meal kits and even in-store dining and entertainment, a threat to restaurants? • Residential and commercial: The wired home and office. The first "digitally native" generation buying homes and taking over the workforce Learn more about The State of Real Estate Alvin Wade National Managing Partner Construction, Real Estate, Hospitality and Restaurants www.linkedin.com/in/alvin-wade-b8ba957
- 9. Convergence Not-for-Profit Technology changes how students learn and how non-profits communicate and raise funds • Learning: The evolution of online learning through Massive Open Online Courses (MOOCs). Four universities now offering degrees – and charging tuition – based on MOOCs • Technology development: University IT departments incorporating “crowdsourced” technology • Communicating: Not-for-profits are communicating and engaging via social media • Fundraising: Not-for-profits are finding alternatives to direct mail and phone calls. Changes include texting for donations and technology enabled special events (#GivingTuesday). Learn more about The State of Not for Profit Mark Oster National Managing Partner Not for Profit @mark_oster www.linkedin.com/in/mark-oster-5722278
- 11. We are beginning to see President Trump's intentions to change regulatory requirements • Already, the Trump Administration issued more presidential directives than any president in modern history, addressing many of the promises made on the campaign trail. • The freeze on regulatory action is standard practice for a new administration. The directive on the ACA is more unusual and there still isn't clarity on what it requires. Both fulfill promises made on the campaign trail. • The broad regulatory freeze may block late regulatory actions of the Obama administration that published in the Federal Register. That calls into question the future of a new bailout-prevention rule the Federal Reserve completed last month. • Two leading bills to achieve cutting regulations: Regulations from the Executive in Need of Scrutiny Act (REINS Act) and the Searching for and Cutting Regulations that are Unnecessarily Burdensome Act (SCRUB Act).
- 12. Health care Repeal and replace – plenty of uncertainty • A budget resolution to repeal parts of the Affordable Care Act using the budget reconciliation process. • The budget resolution passed last week would allow Republicans to repeal some of the ACA with 50 votes in the Senate, with Vice President Mike Pence as the tie breaker. However, reconciliation comes with restrictions. Reconciliation does not allow for provisions that do not affect tax revenue or government spending outside the 10-year budget window. • Republicans are debating among themselves the best way forward. Leaders are generally calling for a delayed repeal that would give Congress time to write ACA replacement legislation, while Trump and some rank-and-file members are pushing for immediate repeal. • Republican Senators Bill Cassidy and Susan Collins introduced draft legislation to replace ACA if it is repealed – If States Like Their Obamacare, They Can Keep It. • 20% tariff on imports from Mexico: US imports more medical, surgical, dental instruments from Mexico than any other county. Anne McGeorge National Managing Partner Health Care @beanrunner www.linkedin.com/in/anne-mcgeorge-53480111
- 13. Health care Repeal and replace – plenty of uncertainty • The impact to Providers -- potentially negative • The impact to Insurers -- both positive and negative • The Impact to Consumers -- potentially negative • The Impact to Employers -- potentially positive • The Impact to Investors -- potentially positive • The Impact to Government Agencies and States -- potentially significant change More about ACA
- 14. Energy: An "America First" Energy Plan • The American First energy plan as described on WhiteHouse.gov, indicates a major shift from the Obama administration policies, by moving to eliminate climate regulations and boost coal, oil and gas production. • On January 24, President Trump signed an executive order reviving the Keystone XL and Dakota Access pipelines. Keystone is expected to spin off 20,000 construction and manufacturing jobs, and add $3 billion to GDP. • Future of Department of Energy, EPA, and eventual impact on energy companies • Impact of border adjustable tax Learn more about The State of Exploration & Production Kevin Schroeder National Managing Partner Energy @schro_kevin www.linkedin.com/in/kevin-schroeder-9177aa27
- 15. Banking Future of Dodd Frank, Consumer Financial Protection Bureau • Dodd Frank likely to be rolled back, as promised on the campaign trail • Department of Labor (DoL) fiduciary rule faces uncertain future as Trump calls for less regulation • Future of the Consumer Financial Protection Bureau - is a fight on the horizon? Will Trump replace current director Cordray with a Republican director who opposes the agency's mission. Learn more about The State of Banking Mark Lastner National Managing Director Financial Services www.linkedin.com/in/mark-lastner-0466896
- 16. Private Equity Future of carried interest • Can President Trump unilaterally end the "carried interest” loophole? • He spoke against carried-interest during the campaign, labeling some hedge fund managers “paper pushers” who are “getting away with murder.” • To date, congressional Republicans have not targeted carried interest as a priority action • Changes in trade policy and tariffs may impact PE investing Sal Fira National Managing Partner Private Equity www.linkedin.com/in/sal-fira-01a984
- 17. Connect with our industry leaders Nichole Jordan National Managing Partner Clients, Markets and Industries @NicholeJordan26 www.linkedin.com/in/nicholeajordan Steve Perkins National Managing Director Technology Industry @StevePerkinsGT www.linkedin.com/in/steven-perkins-56332211 Mark Lastner National Managing Director Financial Services www.linkedin.com/in/mark-lastner-0466896 Jeff French National Managing Partner Consumer & Industrial Products @jfrenchgt www.linkedin.com/in/jefffrench1 Alvin Wade National Managing Partner Construction, Real Estate, Hospitality and Restaurants www.linkedin.com/in/alvin-wade-b8ba957 Kevin Schroeder National Managing Partner Energy @schro_kevin www.linkedin.com/in/kevin-schroeder-9177aa27 Anne McGeorge National Managing Partner Health Care @beanrunner www.linkedin.com/in/anne-mcgeorge-53480111 Mark Oster National Managing Partner Not for Profit @mark_oster www.linkedin.com/in/mark-oster-5722278 Sal Fira National Managing Partner Private Equity www.linkedin.com/in/sal-fira-01a984 Replay our Future of Industry webcast >>
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