MAY 2019 / NO. 2
TAGS: EUROPE, PARLIAMENT, CRISES, GRAY RHINO, ECONOMY, GOVERNMENT, DEBT, A.I., BIG DATA, NANOTECHNOLOGY, BIOTECHNOLOGY, HYDROGEN TECHNOLOGY, EU LISBOA 2000, FLOATING STRATEGY, APPLE, ORACLE, WELLS FARGO, SHELL, UNILEVER, PHILIPS, AHOLD, DELHAIZE, DSM, MANAGEMENT OF FEAR

Free Floating Strategy is the management of fear

Is Europe driving towards political integration, one defense force, new taxes, and one budget for the eurozone countries?
This is long-term. For the short-term Europe has huge problems as described with the ‘Gray Rhinos’ below.
The upcoming week European citizens have the opportunity to elect the next ‘bunch of nonos’ in the European Parliament. Around 750 heavely overpaid politicians. Ask yourself what the Europeans got from them in exchange. Are you able to list 10 examples of their achievements? From our strategic intelligence perspectives we foresee crucial economic issues Europe is facing. We call them ‘The Gray Rhinos’. Gray Rhinos are threats already at the horizon, however, we don’t want to see them.

Gray Rhinos in Europe

Europe is the biggest trade block with an economic engine in the lowest gear. Europe hardly invests in the future such as artificial intelligence, big data, nano- and biotechnology, hydrogen technology and more. Europe has a few companies in the Global Technology Top-50. Europe is not prepared for the next economic crisis. Government debts are far too high, reforms go very slow and the future earning capacity is lacking behind. European banks are still weak performers compared to US banks. Biggest Gray Rhino is the danger of implosion between the northern and southern part of Europe. What do our leaders? Meetings, summits, lunches, dining and wining. Do you remember the EU Lisboa 2000 collective ambition? “In 2010 Europe should be the leading knowledge economy in the world”.

Free Floating Strategy is the management of fear

Free floating strategy are the buybacks because of lacking investment opportunities in research & development, innovation and beyond. In 2018 US companies spended US$ 806 billion on buybacks, with Apple, Oracle and Wells Fargo in the lead. This was 36% higher compared to 2007, just before the crisis. Also in the Netherlands buybacks are high and in 2018 initiated by companies like Shell, Unilever, Philips, Ahold Delhaize and DSM. Buybacks are not value-neutral however are value-destroying. US research showed that buybacks are not even the solution to increase shareholdersvalue. We foresee that the level of buybacks in 2019-2020 will even be higher. We see Free Floating Strategies as the ‘Management of Fear’, which has nothing to do with strategy at all.
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