As we begin the New Year, the U.S. economy continues to exhibit remarkable resilience despite the many economic and political challenges that threatened to derail it in 2013. Despite the continuing political headwinds carried forward from 2013, the U.S. economy is expected to grow from the current 1.7 percent GDP growth rate to 3 percent in 2014. This economic growth is due to several factors:

  • The natural healing process from the 2008/2009 world economic crisis.
  • New engines for industrial growth have emerged with the recovery of the automobile industry and U.S. energy industry production.
  • A buoyant technology sector and a riptide of innovation that is overturning old business models.
  • Low inflation and energy costs.
  • Near zero interest rates, providing cheap capital for company expansion and acquisitions.

Here are my five key business predictions for 2014:

1. Access to Business Capital

A confluence of trends will contribute to making financing more available to promising private companies:

  • Small and regional bank capital requirements will be loosened to help push cash out of the banks.
  • Interest rates will remain low through the 2014 elections but will rise shortly after as the economy continues to recover and unemployment drops to 6 percent.
  • Crowdfunding (for example, Kickstarter.com) will go from fad to trend for funding private company ventures and product development.

2. Emerging Technology Trends

Innovation will accelerate, producing fast-growing upstarts that overturn industry landscapes, creating new winners and losers:

  • The cloud is already "technology past." Private clouds will enable private companies to achieve greater scale and reach, with fewer employees.
  • Don't let an innovator out-mobilize you. Customers, not business, will lead the next phase of the transformation in technology.
  • "Globalizing from Day One" -- Private companies will continue to go global at an earlier stage, by adopting Software as a Service (SaaS) technology and ramping up global business partnerships.
  • Social media and enterprise technology will merge, enabling global design collaboration and cross-organization thinking.
  • Mobile technology will go mainstream - mobile apps will be the new "website."

3. New Business Models

New and better ways for companies to create, deliver, and capture value to their target segments will continue to proliferate:

  • "Onshoring" will become a reality. With the rising demand for U.S.-made products over foreign-produced products, and rising international labor rates, companies will look to move more overseas manufacturing to the U.S.
  • Microfranchising will boom in 2014. A new concept, carried over from less developed countries. Microfranchising, the franchising of very small businesses, will allow people with a passion but limited capital to be entrepreneurs and pursue their own American Dream.
  • Smart companies will be open to reconfiguring their activities, replacing their full-time sales force with "virtual sales models" as social media moves into the business mainstream.

4. New Opportunities--and Threats

Staying ahead of the competition will require ever more relentless focus on what differentiates you and creates value for your target segments:

  • Generational reversal (high unemployment among the young, lower for experienced older workers) will be a growing trend.
  • Demand for U.S. branded consumer goods by an expanding middle class in developing-market countries will surge.
  • Growing demand and shrinking supply of housing will increase homeowner's household wealth and consumer confidence, propelling the economy to new heights.

5. Lower Energy Costs

A new world of American energy exploration and production is creating widespread opportunity:

  • Continuing concern about global warming will boost renewable energy and other low-carbon technologies.
  • Abundance of U.S. natural gas and the significant cost advantage over oil will turn the U.S. into an exporter of oil.
  • Lower energy costs will help boost corporate profits to record levels in 2014.

Time will tell as to which predictions will come true for 2014. The key is to harness powerful trends in ways that support your value proposition and market penetration.

Michael Evans is the Northern California Managing Director of the Newport Board Group, a partnership of board directors and senior executive leaders. Newportboardgroup.com

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