Prediction for 2024

Predictions about the future are precarious, especially in times of volatility and uncertainty. However, rough predictions are always possible. In this period, the following conditions shaping the new environment are given,

• Capital and money costs (interest rate appreciation) due to inflation
• Ecology and environmental protection due to global warming and climate change
• National, European and international institutional and legal environment on investment terms and conditions
• Technology in relation to communication and information,
• Social environment of digital network interconnection, transmission and dynamic processing of information
• Political environment of increased capabilities and expectations of citizens in relation to the rights they have and the obligations they undertake
• National, regional and international security, which requires modern and comprehensive national upgrading and the multi-factorial reinforcement of states to compensate for tensions and risks at every level

Of course, these mainly concern the economy, but they extend to technology, ecology and security.

In general however, what is already visible and we can expect the new year and possibly in the next years to develop further, is the shift towards technology and economy. This concerns private and mainly public investments in projects, services and infrastructure. However, it expands and is imposed, due to the factors mentioned above, as a general trend in broader  developments.

At the financial and investment level, the emphasis is more on quality and less on cost. Specifically, the emphasis is on technology, that means in efficacy and efficiency, reliability and above all in the functionality of the systems. In principle this is in favor of medium to long-term value over short-term price. The dynamic of development, however, exceeds the relativity of economic quantities. Under these conditions, a financial proposal is either functional or not. If it is (functional), it is supported by investment and financing and beyond. If it is not, it is rejected. The issue is also legal. Non-functional or dysfunctional proposals are not supportable economically or ecologically and certainly not legally. In a few words, the dynamics of evolution, which is inevitably driven by the factors mentioned above, elevates evaluation and raises level of economic, technological, ecological and legal qualification of investment and financing proposals and the examination of intermediate fields.

The shift to functionality refers to investments and financial facilities and is certainly legitimate and desirable in any case. It also refers to the participants such as the owners of the infrastructures, the contractors of the projects, the subcontractors and suppliers, the producers and providers of the services, the consumers and users, the financiers, the investors, the institutional, administrative and management of the legal entities and of the investment and financial resources and funds.

This is good news for everyone. On the one hand, because the shift to technology and quality provides the prospect of improvement and development of production and consumption. On the other hand, because the same shift, specifically in the functionality of the economy, provides the prospect of improving management and indeed with liquidity margins. These margins are supported by the upgrade of the (beneficial) result in relation to price and cost in private investments and mainly in public infrastructure and services, concessions and PPPs. Depending on the cost-benefit ratio, the function of profit and value, the (utility) performance and the (economic) result are correspondingly upgraded.

Apart from the agencies, companies, projects and services however, the functionality of the investments also depends on the functionality of the implementation conditions and frameworks and especially of the infrastructures and networks. These infrastructures are technical as well as legal, economic and ecological and they must also be functional accordingly.

This is also good news, insofar as it creates opportunity and provides possibility for stakeholders and companies to participate in infrastructure development. As for example, with the offer and provision of solutions as integral as possible, besides that of the particular products and services. Also, by participation in the study and design, besides the execution of the projects and the implementation of the investments. Finally, with the submission of the relevant proposals either autonomously or in collaborations and joint ventures.

So for 2024, wise is the precise.

With these few thoughts for the coming year, I wish,

Season’s Greetings and Happy New Year to all!