“There are two easy ways to die in the desert–thirst and drowning.”
Believe it or not, more people drown in the desert than die from dehydration. Travelers and hikers taking out across the desert prepare for the lack of water and the hot conditions, but few prepare for the sudden onslaught of quicksand, sandstorms, or flash floods.
The collapse of Silicon Valley Bank, the unthinkable aggression of Russia, the rapid rise of interest rates, sudden changes in the supply chain, and on and on. The world is predictably volatile. Prepare for it.
The dynamics of your community change slowly over time and then suddenly. The evolution of industries is predictable over time, but when it begins to happen, as it is right now, there is often acute pain. Automation of business services is accelerating and feeding countries like India, which grew at nearly 7% GDP last year due to China’s problems and the acceleration of the work-from-anywhere culture. Reshoring has brought manufacturing back to the United States, but also created additional competition for workers and market share.
So how do we avoid drowning in the desert? First, be vigilant in studying and speaking with your core businesses. Understand their fundamental issues and the competitive forces they face. Second, aggressively and unapologetically diversify your economy. Seek investors and build out your ecosystem so it can withstand changes. Third, invest in your entrepreneurs. Make it easy for them to start, and share risk with them as they grow. Finally, adjust and modernize your policies to attract capital and talented working people, and to increase the development of infrastructure.
The first quarter of 2023 and the spring weather are great reminders of how quickly things can change. Stay prepared, stay vigilant, and stay after it!
– Kenny McDonald