I think probably the most dominant change that we are facing is the growing impact of politics on business. This is an ongoing challenge that has never been greater. We’re witnessing now in China, and in Europe and the United States, is this tug-of-war between a business sector that is looking for a strong message, strong leadership, and a little more consistency from government and what government can realistically provide. The cycle of politicians is just too short. The insecurity around politicians toward their own careers has had a severe impact. Government is not acting swiftly enough.
Only when government is backed against the wall do we see action. And it’s that atmosphere and the binary outcomes that have created an environment in which executives who are running large, interconnected companies are frightened of planning out too far. We see the symptoms of that fear in the increased cash holdings.
Globally, corporations are seeing massive sums of cash—we’re talking trillions of dollars. They’re not hiring, not building as many factories today. They’re not willing to take that risk because the uncertainty around the situation in Europe, the United States, and even China has truncated the decision-making process and in many cases has created an atmosphere in which making no decision is probably the right path.