Firms overwhelmingly cite two factors to account for this increasing complexity. Of those surveyed, 37 percent believe market rules and regulation changes have played a part – second only to the UK's 46 percent. The economic environment and recession was also identified as a key reason by 28 percent of businesses, five percent higher than the global average. Increasing competition and pressures from globalization, at 10 percent and 2 percent, are deemed far less significant factors for Americans than in most other countries worldwide.
When looking ahead over the next two years, complexity is generally expected to increase further. 63 percent of respondents predict that complexity will increase very or somewhat significantly. Less than one in 10 forecast a simplified business landscape.
In line with most other places in the world, regulation is held largely accountable for complexity in business today, with 43 percent of American businesses identifying it as one of the two key reasons. Far fewer think tax policy is contributing to the complexity issue (20 percent – 6 percent below the global average).
Information management appears to be more vexing, being highlighted as one of the top two complexity triggers by 34 percent of American firms, trailing only Canada and Australia on the global scene. Corresponding with the general picture worldwide, having more risks to manage (90 percent) and increased costs (86 percent) were the major challenges created by rising complexity.
Approximately three-quarters of the American businesspeople questioned see potential opportunities in this increased complexity, primarily in creating new and better business strategies (73 percent) and making their companies more efficient (68 percent). And 65 percent believe that complexity can help them gain a competitive advantage over rivals, reflecting a fundamental optimism about business opportunity.
Over the next two years, just over half of American firms expect the driving forces behind rising complexity to change, with regulation (72 percent) and government oversight (65 percent, joint third behind Mexico and Sweden) continuing as the main causes. Although operating in more countries and conducting mergers and acquisitions were highlighted by 33 percent and 31 percent of Americans respectively, both these factors are predicted to have less significance in the US than on the global stage where they were highlighted by 46 percent and 43 percent respectively, perhaps due to successful historical experience with mergers and acquisitions.
In terms of challenges presented by complexity, 90% of respondents in the U.S. see a straightforward increase in the number of risks that need to be managed. In response, they have focused on two areas to improve the way they handle complexity: 80 percent have improved information management, while 60 percent have reorganized all or part of their businesses. Far fewer firms than the global average (38 percent as opposed to 49 percent) have made investing in new countries part of their response.
A high percentage, 71 percent, of American businesspeople are anticipating different strategies over the next two years to tackle complexity. Far fewer (39 percent) will be concentrating on reorganizing their businesses, and slightly fewer (70 percent) will be further improving information management.
Meanwhile, 44 percent will attempt to influence regulation or public policy. Investing in new countries (25 percent compared to a global average of 42 percent, the lowest in the survey) and carrying out mergers and acquisitions (27 percent compared to a global average of 43 percent, the second lowest in the survey after Singapore's 15 percent) appear to be comparatively unpopular plans.
Despite only one-in-four American firms contemplating expanding into new countries to combat complexity, 93 percent believe that governments need to work together to maker the global regulatory environment more streamlined. And a similarly high proportion (94 percent) concur that managing complexity is integral to the success of their business.
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