Mergers and Acquisitions are likely to increase before the next big bull run. This chart shows that we aren't there yet.
We're at the point in the economic recovery cycle where a lot of companies have folded, or will soon fold. On the other hand, the survivors are starting to see the clearing … or at least the light at the end of the tunnel. Consequently, I expect to see more merger and acquisition activity at the next pull-back.
This will help the strong get stronger … But it will also serve as a catalyst to new growth and new leaders.
M&A Isn't the Only Way.
This is a great environment to incubate what comes next. During downturns, some people lose their money, business, or hope. During that same period, other people recognize and seize the opportunity to create something great.
There so much talent on the street right now looking for work … yet there is even more looking for something that inspires them.
At the same time, technology continues to
get better. And that just means it continues to get cheaper and easier to implement
great ideas and scalable businesses.
Consequently, I think a lot of talent is going to switch from the confines of
corporate America to more entrepreneurial ventures. Bright minds will
shed cost-cutting cultures and management-by-committee for virtual
teams of talented individuals looking to innovate and operate more
nimbly.
Something Old is New Again.
Sometimes new things come from familiar faces. There are many
successful entrepreneurs who have been to the brink, and back. What's
interesting is that
they tend to succeed faster, later in their
careers. It makes sense if you think about it; losing money or facing a
setback doesn't take away the other skills that they had … so their
next venture is easier for them simply because they
are more experienced and better seasoned.
Nonetheless, I'm confident that we will soon see a new wave of
the business leaders emerge. I'm curious who you think the likely winners will be?
I agree with you about new entrepreneurs emerging. If only we didn’t have an anti-business, confiscatory regime in place in Washington (not to mention an imploding currency) I’d agree with you even more. But those factors will unfortunately cause emergence of new businesses to be significantly slower than they would be otherwise.
Ahh, the eco-system of business … Adapt & Evolve or wait-and-see.
At some point, the environment will kill-off or scare away enough competition for new opportunities to emerge.
Some of those opportunities are to change the ground-rules to be more pro-business.
Though there are still many challenges, our tax rate is low enough in comparison to other first-world economies that it reminds me of the joke about democracy sucking … but still being the best form of government.
I agree that there are plenty of real barriers on the playing field. Still, I have a belief that cream rises to top, and that the most masterful performances are often done under tough external circumstances.