Entering Uncharted Waters

Since the global markets are decidedly being driven by emotion rather than logic, there's no telling how long it will take the global markets to right themselves. Let's hope that when it occurs, the damage isn't too severe.

One thing is certain: The morning after will be totally new waters for the global markets, which seems to be an appropriate topic for a Columbus Day issue of DWT.

A few predictions foretell that there will be fewer participants in the market as bankruptcies and acquisitions continue to dominate the headlines. From a macro perspective, this means that the surviving firms will be handling even larger volumes than they do today and capacity planning will take on an even a more critical role than it does today. Finding better ways to manage this growth, such as using predictive technology (see story, this issue), will become critical.

Secondly, expect a bit of a tail-off in innovation. With few firms participating in the markets, there will be fewer incubators for innovation. Those firms that do survive will be in a "do more with less" mode for a while as they integrate their acquisitions.

On the positive side, expect to see a number of tier-two firms called up into the Premiership as they pick up talent that is being discarded by the tier-one firms. In the past, these firms may have relied on their tier-one firms to provide them with technology, such as trading algorithms and smart order routers that the smaller shops couldn't develop internally. Now, they'll have the same intellectual capital as the larger firms roll out these solutions to their clients.

The rise of innovation may take an overall hit, but expect it to be distributed far more evenly.

Comments? Send them to me at rob.daly@incisivemedia.com.