State of the Economy - Guild of Entrepreneurs

As entrepreneurs, it’s critical that we have an accurate understanding of current economic conditions to guide our decision making. With so much uncertainty and conflicting information, where can we turn for an objective, experienced perspective?

I’m pleased to announce that on Monday, September 11th at 3pm AEST, The Guild of Entrepreneurs will be hosting an exclusive virtual event with leading economist and portfolio manager Nitesh Patel.

Nitesh has over 20 years of experience analyzing economic trends across global markets. He currently serves as a Portfolio Manager at Financial Clarity, managing investment strategies across multiple asset classes.

In this online session, Nitesh will provide his assessment of factors impacting the economy including inflation, interest rates, demand forecasts, and more. He’ll also take audience questions so you can get his insights on issues directly relevant to your business.

Look forward to seeing you there!

Question @Alex , is it Monday or Thursday? And is it Aug 11 or Sep 11? The calendar says Sep 11, but the text says Aug 11.

Thanks @levinakdj, good catch (fixed up now) I clear hallucinated there :sweat_smile:

This is great, thanks for organising Alex!

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Hey @Katrina_Reframe! So glad it is of interest! Did you have any questions I should add to the list?

Welcome Katrina to Guild community.

very cool Alex.

I’d be curious about Nitesh’s take on:

  • What’s been the ongoing impact of COVID-19 on our economy?

  • What impact does he foresee of all this AI tech in the next 10 - 20 years in terms of job losses? Is it really as big a deal as the media seem to be making it?

  • What other “waves” are happening (or about to happen) that entrepreneurs might want to get in front of?

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Love it, thanks Anf! Great questions

(geopolitics) (globalism in retreat) (food for thought)

So Apple has shed $200B in light of this. I cite this not that it has material impact in and of itself, but to highlight the impact of geopolitics and the accelerating decline in globalism on the future state of the global and local economy.

I see it first hand in my businesses; we now have to certify the absence of Chinese components in some of our products being delivered to US Government as well as greater (bureaucratic) impediments getting things into and out of China and the US (Europe is unchanged, it’s always been difficult there!). We are seeing a rapid rise in native Chinese technologies, in sectors recently laid waste by COVID, the global semiconductor crunch as a consequence, and the supply chain and logistics crises of the recent past. Meanwhile China is seemingly overcoming high tech sanctions faster than the West thought possible while its own economy is resting on very shaky foundations with a generation of mis-allocated capital expenditure, property especially, facing a demographic cliff that makes Japan’s look like small fry in comparison.

In the past the world has benefited from China’s export of deflation. The reverse is true now. Central banks have raised rates in a (stupid) attempt to reduce demand to match suppressed supply (by landing hammer blows on those who can lead afford and it and least deserve to carry the burden of it) to “reduce inflation” and engineer a “soft landing” for national and the global economy. Fat chance.

There is a rising global shortage of “euro-dollars” (i.e. US dollars outside the US) as US led sanctions backfire and the uni-polar US led world of 1992 to 2015 increasingly becomes bipolar (in both senses of the word), all the while, talk of BRICS abandoning the US dollar for international trade (fat chance) and Treasury Bond yield inversions at a scale not seen since before the GFC tell a story few prognosticators have yet put together into a coherent narrative.

Ah, it means nothing, “she’ll be right”, right?

Meanwhile a hot war in Ukraine and tensions in the South China Sea and Taiwan escalate while Europe stagnates, Britain falls off the Brexit triggered economic cliff, and the US eyes the next Presidential election with a geriatric incumbent, and a false prophet who would do P.T. Barnum proud, facing the wrath of the power elite through a radically politicised “legal system” who looks ever more likely to run his presidential campaign from prison.

And don’t look now, but global planetary temperatures have recorded their highest levels since we actually kept records, while Greece is simultaneously in flames and floods, Maui gets burnt to a cinder, and the stage looks set for ever more of the same, almost anywhere you care to look.

I say all this not to be alarmist, but to set some context for a discussion about the state of the economy and the viability of making any reasonable forecasts as to the future of it. And I’ve not even touched upon the rise of AI (I’ve said a lot about these elsewhere) or the fact that the Nuclear threat has not gone away, we’ve just fogotten it exists.

My point? It’s simply not possible to (productively) talk about the economy on its own. We need to address the elephants in the room and think through the implications for society given the entire thing rests of the ecology of the planet’s biosphere. What kind of economy do we have? Is it suitable and up for the challenges ahead? What sort of changes does it require to be “fit for purpose”? What is that purpose?

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My word @bruce you have packed a lot in there! Well done! I’ll be sure to raise as much of this as possible on Monday!

What Bruce posted is an eye opener for me and my people (the Filipinos) living in the Philippines. Contextually speaking, there are some ways we could potentially respond to the challenging global economic and geopolitical situation described:

  • Seek greater self-reliance and sustainability for our economy, while still welcoming beneficial global trade and investment. Reduced reliance on imports for key goods and services could cushion some global shocks.
  • Diversify our economic relationships and partnerships. Avoid over-dependency on any single country. Engage multilaterally with ASEAN and others.
  • Invest heavily in education, infrastructure and innovation. Build capacity for high-value services/manufacturing. Develop technologies tailored to local needs.
  • Prepare people and systems to adapt to climate change impacts. Strengthen disaster resilience. Transition energetically towards renewables.
  • Remain resolutely committed to democracy, human rights and the rule of law. Set an example of stable, transparent and accountable institutions.
  • Be judicious in taking sides globally. Be a friend to all, an enemy to none. Help mediate conflicts when possible.
  • Assume greater responsibility as a middle power in promoting sustainable development, human dignity and a rules-based international order.
  • Stay optimistic and avoid despair. Have faith in the strength, decency and creativity of the Filipino people to overcome challenges when united.
  • Pray for divine guidance and blessings amidst the storms of life. Appeal to the better angels of human nature.

The path ahead promises to be difficult, but not impossible. With pragmatism, courage and compassion, we can advance as a nation despite global turbulence. Bayanihan and matatag spirit can see us through.


The question of Anf reminds me of our situation in the Philippines. I realize that there are things that we are trying to consider as described:

  • Economic contraction - The Philippine economy contracted by 9.5% in 2020 due to lockdowns and reduced economic activity during the pandemic. The economy rebounded in 2021 with growth of 5.7%, but some sectors are still recovering.
  • Unemployment - Unemployment rose to a high of 17.7% in 2020 during lockdowns. It has improved to around 5-6% in 2022 but is still higher than pre-pandemic levels. Many jobs have not returned after business closures.
  • Tourism decline - International tourist arrivals dropped over 80% in 2020 compared to 2019. Domestic tourism has recovered somewhat, but overall tourism remains well below pre-pandemic levels. This has impacted industries like hotels, airlines, restaurants.
  • Supply chain disruptions - Lockdowns and mobility restrictions disrupted manufacturing and logistics chains globally and domestically. This led to shortages of some goods, higher business costs, and reduced trade.
  • Rising debt - Government debt rose significantly to finance COVID-19 response and recovery efforts, rising from 39.6% of GDP in 2019 to 63.5% in 2022. This reduces fiscal space for future shocks.
  • Poverty increase - Poverty rose to 23.7% in the first half of 2021 compared to 16.7% in 2018, indicating COVID’s disproportionate economic impact on the poor.
  • Remittance decline - Remittances from overseas Filipinos dropped in 2020 but rebounded to record highs in 2021-2022. However, growth is slowing.

The Philippines’ economy continues to recover, but certain sectors and groups are still struggling from COVID-19’s economic impacts. Managing debt, boosting jobs and tourism, and supporting the hardest-hit will be key going forward.

As a Filipino, I really have to think about it to gain insights and understanding

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Very interesting thoughts Joel!

One challenge I see and which @bruce is alluding to and one he has spoken about elsewhere

You say

The challenge at this point in the inflection curve of change is what does education even look like now? I’d be concerned about investing heavily in any of the old structures as I think a massive re-think of everything is required first.

“We have a legal disclaimer that says you, as an investor, stand to lose all your money,” he says. “We are not here to make your return. We’re here to achieve a technical mission, foremost. And, oh, by the way, we don’t really know what role money will play in a post-AGI world.”
Adam D’Angelo - Board Member of OpenAI

OpenAI’s financial documents even stipulate a kind of exit contingency for when AI wipes away our whole economic system.

I would expect them to be ahead of the curve on this. A interesting point here for me, is that I don’t think they are acknowledging the full reality. Not that they’re wrong, in principle, they are most definitely not. Not that they don’t know it either. It’s just that I don’t think they are (publicly) accounting for the social, political and governance infrastructure they apparently rely upon, to make statements like this. It is these foundational aspects they are simply waiving away. There’s a reason they have a lot of VC support, despite saying the obvious.

Makes me think of “Get rich or die (/destroy everything) trying”

Free products paid for entirely by advertising. Is this the future perhaps?

Only in America!? Nothing is “free”. You have to ask where are the true costs and who bears them. Not critical of their observation that, as marginal costs of production approach zero, things can be made to “appear free” but only for a while. The other side of the ledger (incomes) will “catch up” (err, I mean “catch down”) at some point. At the end of the day all this is an arbitrage play, until a new “equilibrium” is established. And all those bloody empty water bottles! Another cost that has been “externalised” I bet.

I completely agree they are just riding a temporary arbitrage opportunity here. Advertising is built on the concept that someone has money to pay for something. If products were all to become free then advertising would cease to make any sense.

Rapid change is reality. But how could a nation in the Third-World Country like the Philippines can ride to this rapid change to positively welcome the AI world? As people-oriented group, big thought are described:

The rise of artificial intelligence presents both immense opportunity and disruption. Rather than resist or fear this wave of change, Filipinos can choose to ride it by adopting a mindset of “Bayanihan AI” - harnessing technology for the collective good.

By taking an inclusive, ethical and compassionate approach, we can develop and apply AI to uplift our society - connecting remote communities, improving education and healthcare, optimizing agriculture, strengthening disaster resilience and more. We can be at the forefront of empowering marginalized voices and championing equity.

If guided properly with foresight and values of shared prosperity, AI can help the Philippines overcome systemic challenges and accelerate sustainable nation-building. The future remains unwritten - our actions today will determine if AI ushers in a golden age of broad human development or exacerbates divides. With solidarity, wisdom and hope, we can write an inspiring story for generations to come.

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