Lists of top news stories of 2013 have already started to appear in the media. But most have a popular focus on politics, sensational crime, disasters, and celebrities. Here is a collection chosen with middle market companies in mind. Their importance rests on the impact they could have on your business now and in the coming year.
JOBS Act Solicitation Goes Live
The Jumpstart Our Business Startups, or JOBS, Act of 2012 was an attempt by Congress and the administration to ease the ability for companies of all sizes to gain access to capital. Those with annual revenues of less than $1 billion had access to less stringent rules on raising money. The law also ended the "general solicitation" ban on advertising for investment. That last part went into effect in September. Mid-market companies have more flexibility in how they raise money, even using social networks, and should consider these new capabilities in strategic financial planning. Expected for next year: rules on crowdfunding to raise money through Web-based portals.
Affordable Care Act
Was the healthcare.gov rollout a mess? Oh, yes. But it's straightening out. Ignoring the initial bumps, it's time to look at the longer-term implications. Best guesses are that if so-called Obamacare can be up and running for at least six to nine months, it will become politically impossible to repeal because there are too many features that are popular. There are potential cost implications for employers, such as the removal of benefit caps and parents being allowed to keep children on until age 26. There are also subtler implications. Small businesses will be able to receive subsidies to offer care, which could mean that smaller competitors will be more likely to offer full healthcare, removing one of the advantages mid-sized firms have had in attracting talent. At the same time, limits on how much profit and overhead insurers can tack on could mean an ongoing savings.
NSA Spying
Revelations from the documents Edward Snowden provided to journalists have given many reasons to reconsider how the U.S. government is directing actions against terrorism. But there are many business implications. One estimate says that spying could cost tech firms $35 billion because of increased reluctance to use cloud-based computing, which might be open to secret subpoenas. Direct spying on foreign leaders could make other countries less welcoming of U.S.-based businesses. Greater privacy for customers, whether consumers or businesses, could become a competitive advantage. Also, there is already evidence that other countries have undertaken significant spying efforts, and sensitive information could potentially allow a government to provide strategic information and competitive advantages to their native industries. Increased security in communications will become necessary.
Automation and Robotics
Another of the top news stories of 2013 - increased automation and robotics - has been treated largely as a curiosity by most of the press. But such developments as Amazon's experiments in using unmanned drones to deliver packages, Google actually selling some self-driving cars, and advances in general-application robots should have middle market business managers paying close attention. The rapid improvement in all manners of automation has significant implications for production lines, service delivery, and staffing. Any company that doesn't consider how automation and robotics could be useful runs the risk of seeing competitors gain a significant economic advantage.
Income Inequality and the Minimum Wage
Income inequality has been a growing problem in the U.S. for the last 30 years as companies retained productivity gains and did not more broadly share them through improved wages, salaries, and benefits as in the past. This has turned into massive bad PR for fast food chains and a national push to increase state and national minimum wages. The drive isn't just a "liberal" action. Dominic Barton, global managing director at management consultancy McKinsey & Co., has called income inequality the biggest challenge to capitalism because of societal divisions and pressure on government safety nets. California businessman Ron Utz, who is usually identified with conservative ballot initiatives in his state, is calling for a $12 minimum wage there to reduce the need for government assistance. Many economists also argue that the growing income gap has been a heavy weight on the economy. Expect more pressure on a greater number and range of companies to increase wages, and the focus will begin to stray beyond global giants to middle market companies. Getting ahead on what might be an inevitable issue could burnish reputations and become a competitive advantage.
Slow Economic Recovery
Economic growth has been tepid, although the global economy has shown recent signs of improvement, particularly as the U.S. and Europe continue to recover. But that may have been partly a result of inventory stockpiling. China's growth will likely slow, which could put a drag on companies hoping to export to the country. Profits have outpaced economic growth, though, and stock prices seem disconnected from jobs and production, which is dangerous. Eventually there is little to no fat left in budgets and headcount is at a minimum for the work that needs to be done, and that might mean a trickle-down effect to middle market companies that serve them. At the very least, managers should begin some serious scenario planning, with low/no profit growth conditions taken into account.
Cloud Computing Goes Mainstream
Cloud computing is no longer a buzzword. Mid-sized companies continue to find that computing infrastructures and software deployments can be hosted on publicly available cloud services. Ultimately, businesses can reduce capital expenses and even administration costs. IT departments do need to emphasize new skills, as there will be more of a premium on the ability to manage vendors with less emphasis on sporting an array of technical skills. Using cloud computing will mean a big shift in strategic planning and operation of computing.
People Move From PCs to Mobile Devices
Plummeting sales of PCs and rapid consumer adoption of smartphones and tablets have profound implications for corporations. With IT departments and budgets smaller than the giants, middle market companies are among those with the most to gain from the change in direction. Employees can be productive virtually anywhere at any time. In either B2C or B2B scenarios, customers can do business when they need to. Nevertheless, a company must implement significant changes in operations, policies, technical infrastructure, software, and practices to make mobile work. Everything from application design to business processes may need adjusting, or outright reconstruction.
Government Gridlock and Ideology
Sometimes having Congress unable to get anything done may seem a blessing. Unfortunately, that often is not the case, particularly when major bills that affect corporations are left to sit. For example, immigration reform is important to many parts of the country, including companies of all sizes that depend on seasonal labor and employees willing to take on jobs that many Americans won't. But the more the government ties itself into knots, the less effectively it can address such critical issues. Middle market companies may not have the money to back full-scale lobbying campaigns, but they can join industry and economic groups to push for more responsible and responsive action on the part of legislators.
Distributed Business
And a roundup of top news stories of 2013 would not be complete without discussion of distributed business. This year saw big growth in 3D printing, for example, and its use not only for prototypes, but actual products. Eventually it will be possible to allow customers to directly print out products, a boon for middle market companies that don't have the distribution infrastructure of larger competitors. Electric vehicle manufacturer Tesla Motors, which was a middle market company as recently as 2012, found large auto companies and their dealers work to block direct sales that occurred outside a normal car distribution model. While distributed business will be an important tool for companies, expect bigger competitors to fight back as they lose some significant advantages previously guaranteed by scale.
Erik Sherman is an NCMM contributor and author whose work has appeared in such publications as The Wall Street Journal, The New York Times Magazine, Newsweek, the Financial Times, Chief Executive, Inc., and Fortune. He also blogs for CBS MoneyWatch. Sherman has extensive experience in corporate communications consulting and is the author or co-author of 10 books. Follow him on Twitter.