Alan Beaulieu, a consulting principal at ITR Economics, is preparing to retire after a distinguished 35-year career in economic forecasting and industry analysis. Beaulieu, who will deliver a keynote address at the National Association of Wholesaler-Distributors’ Executive Summit later this month, recently reflected on his three-decade career and shared economic insights that will have a dramatic impact on businesses in the coming years.
Beaulieu, who co-authored “Prosperity in the Age of Decline” and “Make Your Move,” has spent his career identifying and examining economic trends, and providing forecasting and insight that has helped companies navigate the complex global economy and changing business cycles.
Growth of ITR Economics
Founded in 1989, ITR Economics was just a three-person team when Beaulieu started. Over three decades, the company grew into an 85-person operation. He credits the firm’s success to a relentless focus on client needs, a willingness to change and the embrace of transformative technologies.
“What we did 25 years ago is not what we’re doing today,” he said. “Every step along the way, it’s been about embracing technology and listening to what clients want.”
Adapting to new technologies certainly aided ITR, Beaulieu said, but it was listening to clients and meeting their changing needs that really fueled the firm’s growth. Beaulieu noted some businesses and leaders are slow to change and recognize that the world is changing around them, adding, “If you don’t listen to your clients, you’re not going to spot the change.”
Economic and technological disruption
Throughout his career, Beaulieu witnessed profound shifts in economic policies and technological advancements. He said the most significant disruption in his career has come from shifting attitudes toward government debt.
“The idea that they can spend money on whatever they want, as much as they want, because in the end it’s all good for the economy is irresponsible,” Beaulieu says. “That’s the biggest disruption. Before that, things balanced out. Governments would overspend during crises but then work to reduce debt. That balance is no longer there, and it will reach a critical mass.”
Technological advancements, on the other hand, have been less disruptive and more of an expected and necessary evolution, according to Beaulieu. From the rise of automation over the last decade to AI in recent years, Beaulieu sees technological innovation as a natural progression.
Leadership and thriving in uncertain times
Uncertainty and disruption often present opportunities for business, and much of Beaulieu’s work has focused on the subject. Excelling amid uncertainty is “all about leadership” and a focus on the future, he says.
“If you’re going to thrive in uncertain economic times, it’s going to be because you’re not going to be focused on the present, let alone the past,” Beaulieu said, adding leaders must be able to recognize when the environment changes and adapt accordingly. “That sounds simple, but for a whole lot of leaders, that’s really tough. They’ve been sailing the boat and doing it the same way no matter what the weather has been.”
Businesses and leaders’ willingness to adapt becomes even more important amid heightened uncertainty, Beaulieu says. However, uncertainty is a constant and even in periods of relative calm, some disruptions require “a heads-up view and the ability to bob, duck and weave as necessary.”
Preparing for a 2030 global depression
Perhaps Beaulieu’s boldest call is that the world will enter a global depression from 2030 to 2036, driven by aging demographics, rising debt and inflation. The period will be unlike previous downturns, Beaulieu says, describing the Great Recession of the late 2000s as “a shortfall” compared to the “six-year slip and slide” that will come in 2030.
Positioning your company for a 2030 downturn requires knowing how the industries and markets you serve will be harmed or helped, Beaulieu says, noting different markets and regions will be impacted in vastly different ways. During that period, distributors must be thinking about what markets they should be serving, increasing efficiency and ensuring that earnings do not disappear. For those who prepare for the coming storm, Beaulieu says it will still hurt, but they’ll come out the other side stronger.
“It’ll be entirely different than what anyone in business today has done,” Beaulieu says, adding those who aren’t ready and don’t see the opportunities will be standing still and panicking.
When it comes to preparing for such a downturn, Beaulieu again returns to leadership, saying companies with strong leadership will understand that such a downturn is an opportunity. Profits may decline, but the strongest leaders will weather the storm through increased efficiency and keeping their teams focused and together.
What can distributors do to prepare?
Distributors should prepare for fluctuating market conditions and focus on adding value to their services in the next five to 10 years, Beaulieu says, adding that many have already been doing so in recent years.
“(Distributors) are going to have to do more of what they’ve been doing,” Beaulieu says. “Every distributor that I know of has been doing pretty much the same thing. They’re moving away from being a strict distributor and creating a value-added position. They just have to keep doing that.”
Distributors can add value through different avenues, Beaulieu says, such as value-added intelligence, value-added market opportunities or altering and enhancing products.
“Whatever it happens to be, they need to be in the value-added business, and that’s their differentiator,” he says.
One of the key themes that Beaulieu plans to talk about at NAW’s Executive Summit is inflation. Price increases have slowed, but Beaulieu believes inflation will come roaring back. Distributors need to be making plans for how to evolve and create a value proposition that sells well in a period of inflation. If successful, distributors that adapt should be able to gain market share in a difficult environment, while some competitors that are slow to change will be put out of business.
Executive Summit keynote
In his NAW Executive Summit keynote, Beaulieu plans to address key strategies for preparing for and navigating the coming years. He will discuss labor trends, inflation, interest rates and industry-specific forecasts while advising business leaders to prepare for an economic downturn by creating and conserving wealth, prioritizing cash flow and diversifying investments.
Despite predicting challenges, Beaulieu remains optimistic about North America’s economic resilience. “The US, with Canada and Mexico, will remain strong economic entities. Don’t buy into the end of the world and the United States is doomed. Just get ready for an economic downturn.”
The NAW Executive Summit is being held at the Grand Hyatt in Washington, D.C., on Jan. 27-29. Beaulieu’s keynote, titled “Data Behind the Dollars – Economic Forecast,” will follow the event’s CEO Panel on Jan. 29.
Opinions expressed by SmartBrief contributors are their own.
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