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t h e n ew no rma l
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changes in the
economic climate
Half of the Not-For-Profit Chief
Executives, and over one-quarter
of those in the Public and Private
sectors, rated changes in the
economic climate as one of their
riskiest issues.
According to Chief Executives, economic
uncertainty is having a pervasive
effect across sectors and industries.
Regardless of whether an organisation
operates domestically or across
international boundaries, the global
economy is affecting everyone.
Private sector Chief Executives expressed
repeated concerns about the economic
situation in Europe, described by one
as a “calamity escalator” and another
as “economic Armageddon”. On the
domestic front, household, tourist,
government and business spending is
down, severely affecting organisational
revenues. For some, revenue uncertainty
is further exacerbated on a daily basis
by exchange-rate fluctuations.
In a tight economic climate, more
organisations rely on government
spending, but the government drive
to get into budget surplus means that
funding has been reduced or slow
to materialise. Moreover, where the
government has been spending,
there has been a focus on driving
down prices.
0% 5% 10% 15% 20% 25% 30% 35%
PRIVATE SECTOR
PUBLIC SECTOR
NOT-FOR-PROFIT SECTOR
arket shifts
[
Most highly ranked item ]
hanges in
economic
climate
0%
10%
20%
30%
40%
50%
PRIVATE SECTOR
PUBLIC SECTOR
NOT-FOR-PROFIT SECTOR
[ 4
th most highly ranked item ]
[
Most highly ranked item ]
[
Most highly ranked item ]
0%
5%
10%
15%
20%
PRIVATE SECTOR
PUBLIC SECTOR
NOT-FOR-PROFIT SECTOR
[
Outside the 10 most highly ranked items ]
[ 8
th most highly ranked item ]
)
Emerging
chnologies
[
Outside the 10
most highly
ranked items ]
0%
5%
10%
PRIVATE SECTOR
PUBLIC SECTOR
NOT-FOR-PROFIT SECTOR
[ 5
th most highly ranked item ]
[
Outside the 10 most highly ranked ite
[
Outside the 10 most highly ranked ite
8)
Cultural Barriers
0%
5%
10%
PRIVATE SECTOR
PUBLIC SECTOR
NOT-FOR-PROFIT SECTOR
[ 6
th most highly ranked item ]
[
Outside the 10 most highly ranked ite
[ 5
th most highly ranked item ]
9)
war for
talent
10)
govt led change
0%
5%
10%
PRIVATE SECTOR
PUBLIC SECTOR
NOT-FOR-PROFIT SECTOR
[
Outside the 10 most highly
ranked items ]
[ 3
rd most highly ranked item ]
[
Outside the 10 most highly ranked ite
changes i n the economi c cl imate
Domino effects are seen. For example,
infrastructure organisations that
contract to government are affected
by government spending caps, projects
are abandoned, and new projects stifled.
In turn, those organisations’ suppliers
suffer, waiting for the industry to
pick up. One business’s low spending
means another business’s low revenue;
organisations play a waiting game,
uncertain of when the upturn will hit.
In other industries, similar stories
were told.
The reduced spending has hit the
Public and Not-For-Profit sectors hard.
In local government, for example, some
households cannot afford to pay rates,
reducing councils’ revenue streams.
For Not-For-Profit organisations, the
economy has affected charitable
donations, sponsorship and government
funding to the point of threatening
survival. In fact, one-quarter of Public
and Not-For-Profit organisations said that
fundraising is also among their top three
to five challenges. In turn, this translates
to a sense that there is little ability to
invest in any long-term developments,
innovations or technology.
key findings //
2:
changes in the economic cl imate