Post-election 2024; Time for the Business World to Prepare New Strategies. Elections in various countries, including Indonesia, in 2024 have passed. It is time for all parties to look forward. The business world is no exception.
In the United States (US), Donald Trump was elected for the second time as President. The US under Trump is predicted to tend to be protectionist. Import tariffs rise, the risk of trade wars increases. Trump prioritizes the domestic economy even though he has to violate the principle of free trade.
Post-election 2024; Time for the Business World to Prepare New Strategies
Post-election Indonesia is not expected to change much. However, the highlight is the increase in taxes, various fees, and the increase in the minimum wage. People’s purchasing power is considered to be weakening.
How should the business world in general behave? Companies are always required to adjust to government policies and be strategic in moving forward.
Expectations soared with the inauguration of the new government. Tax regulations, investment climate, and subsidy policies are expected to be more conducive for companies. Similarly, regulations in other fields such as energy, technology, manufacturing, and so on. Infrastructure and strategic projects are becoming more established.
Although external conditions are influential, the fate of the company is ultimately up to you. Companies must be smart in identifying and overcoming opportunities and challenges. In order to be able to face these two things, there are things that must be considered. First, digitalization is becoming more prevalent. Along with this, employee training and digital infrastructure must be strengthened. Next is sustainability. Environmentally friendly practices must be promoted by companies. Commitment to sustainability is getting stronger in many places (although not all are supportive). In this regard, it seems that the Indonesian government is constantly encouraging green initiatives, such as energy transition, waste management, and sustainable business practices. For companies themselves, practices. Next, regarding MSMEs. The government’s commitment to the development of MSMEs has never diminished. Corporations should take advantage of this opportunity to continue to increase their collaboration with MSMEs.
Uncertainty, however small, often accompanies a new government. For this reason, the business world must conduct a comprehensive risk analysis. The analysis should include the impact of new policies (such as taxes, minimum wages, and possible mandatory contributions such as tapera and vehicle insurance obligations) on profits and competitiveness; macroeconomic developments such as economic growth, inflation, and interest rates; geopolitical conditions; and climate change.
After analysing the risks, businesses can start strategizing. Is the company’s vision, mission and strategy still relevant? Is there anything that should be changed? Companies should also concentrate on developing competitive advantages that are in line with the times.
Post-election, companies must be more innovative and agile (although this also applies at all times). Innovation applies to both products and processes. In addition, innovation must certainly be tailored to the evolving needs and tastes of consumers. This ability to innovate is becoming increasingly important in the midst of global economic and political uncertainty.
No matter who the government is, as long as there is no extreme shift in economic policy, human capital will always be the most important factor in a company’s success. In the business world, human capital includes knowledge, skills, behavior, culture, and leadership. Human capabilities in the company must be improved.
Do not underestimate collaboration. After the election, companies must cooperate with the new government. To voice the aspirations and interests of the business world, cooperation with fellow business actors must continue to be enhanced. This is especially important if there are rules that are considered burdensome for companies.
The policies of the Donald Trump administration that seem to have protectionist tendencies must also be anticipated, especially for businesses that rely on the US market. For one country, the purpose of protectionism is to protect domestic producers. However, for other countries, this is certainly not beneficial as export costs rise, supply chains are disrupted, and consumer behavior changes. In addition, protectionism can lead to trade wars as lined countries may retaliate.
The business world certainly cannot do anything about things that are out of its control. However, in response to the potential for protectionism, there are things that can be done. First, try not to rely too much on the US market. Asian, Middle Eastern, or African countries are potential markets. Businesses can also take advantage of regional trade agreements such as ASEAN or the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
In terms of marketing, price and product strategies need to be reviewed. Companies need to continue to improve efficiency so as not to (completely) lose competitiveness. Sales of high value-added products need to be promoted. High value-added products are products that are difficult to replace by other producers.
In order not to rely too much on imported products, companies can use local raw materials or components. This is, of course, whenever possible. Also, diversify suppliers. If logistics are disrupted, the impact will be less severe.
Building strategic partnerships in protectionist countries can also be an option. The goal is to optimize distribution networks and mitigate import tariffs.
Economic diplomacy plays an important role. This diplomacy can be carried out through two channels. First, encourage the government to conduct bilateral negotiations. Second, communicate with US trading partners to formulate a settlement.
Post-election 2024; Time for the Business World to Prepare New Strategies
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