I predict anaemic growth for the Maltese economy. I think companies might hold back on investment decisions or even be tempted to engage in further cost cutting exercises. I think the euro crisis will get much worse before it gets better and this will have a spillover effect on the Maltese economy. I also think that if there is an election this year (the rumour mill is currently running wild) this will be more bad than good for business; the uncertainty and distraction will come at a time when business most needs stability and certainty.

There is very little you can’t buy from eBay or Amazon- Kevin-James Fenech

I predict the continuing demise of retail shopping and the growing disruptive influence of new entrants who embrace technology such as m-commerce, e-marketing and e-commerce. This Christmas, for instance, almost every person I spoke to purchased the bulk of their Christmas shopping online, claiming the price and convenience was far superior to the traditional bricks-and-mortar shopping experience. The truth is that there is very little you can’t buy from eBay or Amazon (& their cohorts) and the convenience not to mention speed of delivery and e-price are first rate. I calculate that I easily saved up to 50 per cent + on my Christmas shopping this year and I did it all from the convenience of my home.

I predict a partial de-merging of the eurozone, meaning some countries leaving the eurozone. I can’t see the cost-cutting efforts of countries like Greece, Spain and Italy delivering the desired results. I think it was Keynes who coined the phrase the “paradox of thrift”: “One person’s spending is another’s income.” So when everyone spends less in a recession, incomes fall. The more people try to save, the more the economy slows, and the harder it is to stimulate growth.

This is why I reckon things have to get a lot worse before things improve on the euro debt crisis front. In fact, in a recent BBC poll of leading economists (consisting of 34 UK and European economists who regularly advise the Bank of England) one fifth said the eurozone would not, in their expert opinion, exist in its current 17-member form, while the majority put the possibility of a eurozone break-up at 30 per cent to 40 per cent.

I predict local banks having to experience, to some degree, haircuts, particularly because of their clients from the property development sector. For those of you who are not familiar with the banking term, a “haircut” means to partially forgive a debt. If you are owed €100, and you can realistically only recoup €80, you’d be taking a €20 haircut if you accept. I think the banks will have to take a haircut on some of their property development related loans, which although bad for bank profits, would be good for the Maltese economy.

I predict a revolution in the field of marketing / advertising with the rise and dominance of the web. The relationship between customer and seller has radically changed; it is no longer a one-way conversation (seller to customer) but a dialogue or even worse a multi-party discussion between customers (or prospective customers), which excludes the seller. Today there are web forums, online customer reviews and price / product comparison sites (to mention but a few); all these mediums talk-up or talk-down your product without you the seller having any say whatsoever.

The balance of power will radically shift from seller to customer in this regard. I therefore predict that this trend will gain serious traction and disrupt several industries. I also think that more and more companies will start to recruit / employ on a full-time basis SEO specialists and/or e-marketing directors and the like to take the marketing fight to the web domain.

I predict the cloud and Apple products will continue to infiltrate the local business scene and aggressively acquire market share from Microsoft and the PC world. I think it won’t be long before big companies start to exchange (in their droves) their servers and over bloated IT departments for cloud services and iPads, iPhones and Mac Books, which will become trusted business tools for the Maltese businessman. I think the myth that Blackberries and PCs serve business better has finally been shattered and 2012 should prove this with Apple and Google dominating the world with Malta being no exception.

I predict that The Times of Malta will continue to be the number one news portal and the definitive, mainstream, newspaper journal. Sure it can improve but I think that it will reap the benefits of the investments it has made in 2012 and beyond.

Lastly, I predict that Maltese business, come what may, will survive and succeed. Maltese business, as it has always done, will turn adversity into opportunity. Long live Maltese business.

www.fenci.eu

Mr Fenech is managing director of FENCI Consulting.