FrontierView recently launched The Lens, a weekly newsletter published by our Global Economics and Scenarios team to highlight developments and trends that will have the highest impact on business scenarios. For the full complimentary newsletter, subscribe today.

Looking back at almost a year of Lens updates, it’s clear that 2019 presented an extraordinarily complex environment for multinational executives. Volatility and uncertainty across markets – developed and emerging – have become the norm. Creating and holding a confident view about the future and accurately forecasting performance is increasingly challenging. 2020 promises to be no less exciting and no less complex an environment in which to steer a global business. Here is some of what we learned this year:

Frontier markets still offer opportunities: They might be under-reported and smaller than the juggernaut emerging markets from the 2000s, but frontier markets continue to offer exciting opportunities for multinationals who are able to navigate their complex operating environments. From Ethiopia to Uzbekistan, a small but select group of countries still hold the promise of rapid growth, “just-opening” environment, and early-mover advantage. Keep an eye out for these.

Politics eats economics’ lunch any day of the week: 2019 brought extraordinary political change, reshaping the operating environment in a number of markets and reminding executives why it is key that they keep an eye on the external environment as they plan their operations. From Hong Kong and Sudan to Algeria, Lebanon to Bolivia, and the Ukraine to the UK, companies need to be ready for local political dynamics to sometimes suddenly change and disrupt demand, costs, and operational activities. A careful scenario planning and monitoring process on the local level is key to navigating these shifting landscapes and finding the opportunities they present.

The outlook for 2020 remains fragile: Despite some welcome news on US-China trade relations over the past week and some cautious improvements in economic data, the downside risks to the global economy in 2020 remain substantial and we haven’t reduced our estimate that the likelihood of a significant global slowdown next year is 35%. Being ready for this requires not only careful planning, but excellence and leadership all the way down to the country level. We’ve seen the difference this makes for example, in markets such as, Turkey where strong local teams have been able to navigate an exceptionally complex environment despite an economic crisis and lingering uncertainty. Investing in your local team leaders’ capabilities may well be one of the best insurance policies for your business as you navigate choppy global waters in 2020.

Traditional international growth strategies are coming under pressure: When demand starts growing at much lower rates, supply chains are under pressure, so competitors become more sophisticated and traditional export-based distributor-dependent models start to break down. We see this among our clients whose global pricing, product, and route to market strategies are getting disrupted by e-commerce and cross border trade. It is also seen in clients whose customers are defecting to good-enough Chinese competitors with lower prices, and whose local partners are struggling to find untapped customer segments either because of skills gaps or poor product fit for the demand that is available in the market. A slow-growth, high-uncertainty global environment will stretch these strategies to the breaking point. Companies that are not ready to bring their execution to the next level will find 2020 even harder to manage than the year just behind us.

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