Win­ter of dis­con­tent

Doyle is even more in­flam­ma­tory in 2016

The Guardian (Charlottetown) - - BUSINESS - Blake Doyle Busi­ness Edge Blake Doyle is The Guardian’s small busi­ness colum­nist. He can be reached at blake@is­landrecruit­

In the first month of the year, I tend to make con­tro­ver­sial fore­casts on what may hap­pen over the en­su­ing 12 months. Last year I made a few wild sug­ges­tions, in­clud­ing oil at un­der $45 per bar­rel; fairly ridicu­lous at the time.

Let me be even more in­flam­ma­tory in 2016. I see noth­ing to pre­vent oil from plung­ing to­ward $20 per bar­rel; prices in­con­ceiv­able since 2001. This is largely driven by fac­tors that can no longer be con­trolled as the en­tire mar­ket me­chan­ics are in dis­ar­ray.

As the oil in­dus­try re­gains its col­lec­tive foot­ing, the im­pacts will be: dis­lo­ca­tion and busi­ness ex­its from the gaso­line retail mar­ket, shale in­dus­try and ex­plo­ration in the US col­lapse, the Cana­dian dol­lar pushed to below 60 cents and pro­found com­pli­ca­tions to pro­vin­cial govern­ment’s bud­get­ing - in­clud­ing PEI’s.

The un­in­tended con­se­quences of the publics’ at­ten­tion to oil pric­ing will re­sult in in­creased dis­rup­tion and al­ter­nate tech­nol­ogy adop­tion. This is al­ready oc­cur­ring and within the next twelve months a num­ber of vi­able auto man­u­fac­tur­ers will un­veil af­ford­able non-com­bus­tion en­gines; in­clud­ing Re­nault/ Nis­san, Tesla, Google, Ap­ple. This quiet dis­rup­tion will un­der­mine the en­tire auto ecosys­tem from re­tail­ers to gaso­line dis­tri­bu­tion to ser­vice cen­ters.

The changes in en­ergy pric­ing will have struc­tural con­se­quences here at home on PEI. We can ex­pect so­cial up­heaval in fam­ily com­po­si­tion; a slow­ing econ­omy will greatly pro­nounce ad­dic­tion is­sues and crimes of des­per­a­tion, in­creas­ing food costs will re­duce dis­cre­tionary spend­ing and ra­tio­nal­ize many lo­cal busi­nesses, and a lack of sig­nif­i­cant con­struc­tion projects will chal­lenge trades and spin off in­vest­ment.

From chal­lenge is spawn op­por­tu­nity, and I re­main ex­cited about the op­por­tu­ni­ties cre­ated in the af­ter­math of the present melt­down. From a pend­ing stock mar­ket cor­rec­tion, (I sus­pect we are only see­ing ini­tial rip­ples of a big­ger fun­da­men­tal mar­ket slide), to new in­dus­tries and dis­place­ment in tra­di­tional sec­tors. The next sev­eral years will be the pe­riod of en­trepreneur­ship en­light­en­ment.

If you are seek­ing em­ploy­ment, you will need to rein­vent your skills or adapt to en­tre­pre­neur­ial op­por­tu­ni­ties. The PEI labour mar­ket will not align well to a new econ­omy. Crit­i­cal to di­ver­si­fy­ing our econ­omy will be the at­trac­tion of new res­i­dents with dif­fer­ent ex­pe­ri­ences and skills, as well as the cap­i­tal and acu­men to take risks trans­form­ing to a new econ­omy. There is lit­tle to sug­gest the Cana­dian dol­lar will re­bound any­where close to the US econ­omy, this will recre­ate the en­vi­ron­ment for ex­port de­vel­op­ment, for those po­si­tioned to take ad­van­tage of the dol­lar dis­count.

2016 will be the year of dis­rup­tion and op­por­tu­nity. A pe­riod I have been wait­ing for and we will have sev­eral years to adapt to new and unimag­ined op­por­tu­ni­ties.

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