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The pace of the business projects I'm fortunate to be working on, is incredibly hectic, but not all business is doing well. Why is that, and how can you spot which are and which aren't and see potential trouble ahead?

Friends tell me that the US venture capital industry is gong at full tilt and straining at every rivet. I also hear that Germany and France are manically busy. By contrast, the business environment in the UK seems to be a raspberry ripple mixture of the good and exciting, and the downright difficult. A walk down almost any town high street, and you can see just how tough it is in over-the-counter retail. Anything near the public sector seems to be completely black, or about to be.  Yet some businesses are struggling to keep up with their own successes. Several of the companies I know have never been busier.

The business environment is being heavily influenced by numerous strong trends, and it's these that give us a key to what's going on. There are big effects from some short term influences, such as budget cut backs by Government, the hang-over from the banking upheaval, and consumers' fears about the financial and employment threats around them. These are causing big issues for certain sectors, notably those supplying central and local governments in many parts of the developed world. The continued absence of credit in many economies remains a serious problem for smaller businesses, although larger companies seem better served.  The short term influences have other, more complex effects. For example, significant currency devaluations have brought a boom to manufacturing exporters, but this is something of an unrepeatable on-off.

Intermingled with these near-term trends are an extraordinary number of big, long term shifts, and it pays to sort out what's going on.  The progressive aging of Western populations is beginning to change the nature of markets and behaviours, and this has only just begun. This trend will affect buying patterns, voting behaviour, and much besides. Likewise, the return of Asia to the dominant world position it had before the Industrial Revolution is only in its early stages. Not only is it a change, but this change is changing, as populations in these countries go through transitions in their cultures in years, that the West spread over more than two centuries. The death of 'Place', made possible by digital technologies and ubiquitous networks, has great implications for businesses of almost all types, from the retailers struggling in the high street, to musicians who must now look for their income to live performances and merchandising.

So the answer to the question of whether we're on the up-swing is: it depends, and the dependencies are often quite complex and nuanced. In this business environment it's very easy to draw the wrong conclusions and make the wrong decisions. I'm seeing a number of businesses that have run into trouble not not their execution, but because they've made faulty strategic decisions. Much shareholder value now depends on how well the market and business trends have been understood in the Boardroom.

(c) 2010, 2011 Peter G. Osborn