In our current and near-future political climate, there is great uncertainty in what key technology, environmental, and trade policies will be—not just in the U.S., but in other markets around the world as well.
One of the biggest threats to the continued expansion of our economies is confidence. When it comes to technology—whether to regulate privacy, security, data, and trade—policy uncertainty is a trigger that could cause the market to overreact.
At the start of the Trump presidency in 2017, the White House promised a “comprehensive review of all federal regulations” for policies involving the environment, such as whether to continue tax credits for electric cars and solar panels, and how much to limit carbon dioxide emissions. Without further specification or guidance, businesses can’t make decisions.
In the past few years, leaders across varied industry sectors have bemoaned uncertainty.
Automakers are still recovering from whiplash: In 2012, there were new rules mandating 39 miles per gallon fuel consumption rates by 2025, but then in 2018 the Trump Administration proposed scrapping the requirement for new cars. Then in January 2020, fuel efficiency policy was reintroduced: Required miles per gallon standards will now increase 1.5% per year from 2021-2026. For the past several years, Americans have been eligible for tax credits for the purchase of new electric vehicles, but this year the credit is being phased out. At the start of the year, automakers will offer $7,500 in credits for each electric vehicle they sell up to 200,000 units. The available credit then gets cut in half six months later, and then it’s halved again (down to $1,875) six months after that. Finally, the credit goes to zero. If democrats win big in November, the entire scheme could change yet again.
Policy uncertainty exists in other critical areas of the U.S. economy: how we will build out 5G networks and how we will interact with countries using networks built on Chinese-made components; how personal data will be used by big tech companies; whether big tech companies will be allowed to continue to operate as they are today, and so on.
Imagine trying to convince a board of directors to take a chance on innovative new ideas and areas of research when they have no real sense of what direction corresponding legislature and regulations might take. Companies could start to blame policy uncertainty for a lack of critical investment in R&D and innovation, which would put countries like the U.S. at a strategic disadvantage compared to nations with less fluctuation in their national leadership. Leadership teams who commit to strategic foresight and long-term planning know how to weather policy uncertainty, but companies without a process in place could find the next several years challenging.
Big tech companies (especially Amazon, Apple, Facebook, and Google), car manufacturers, renewable energy companies, government agencies.
Aerospace, Auto Manufacturers, Banking, Civil Servants/Public Officials, Corporate Boards & Directors, Covid-19/ coronavirus, Defense, Diplomacy, Drug Manufacturers, Education Colleges & Universities, Electric Utilities, Entertainment Industry, Environment, Finance, Foreign & Defense Policy, Gas & Oil, Government - International, Government - National, Government - State and Local, Heavy Industry, Hedge Funds, Information Technology, Law Enforcement, National Security, Non-profits/Foundations/Philanthropists, Pharmaceuticals/Health Products, Private Equity, Technology Company, Telecommunications, Trade Associations, Transportation, Utilities, Venture Capital, Waste Management