In the midst of a complicated world panorama due to the devaluation of currencies, high inflation and the scarcity of raw materials, Colombians are waiting for a tax reform that seeks to collect $20 billion in its first year of validity and that It is estimated that it could reach $25 billion in the last year of Gustavo Petro’s government. And while these changes will impact different sectors of society, one of those that will have to take on the most challenges will be business, since not only will it have to develop more innovative proposals in response to everything that happens in the global macroeconomic context, but these proposals will have to adjust to the complex national environment of high taxes, high inflation and strong devaluation.
And it is that although great modifications have been made to the initial reform project in terms of taxes on pensions, dividends, wealth tax, among others, according to the proposal of the Minister of Finance, José Antonio Ocampo, the companies , will continue to be the main source of collection, since it is projected that in addition to increases in income tax rates and surcharges to sectors such as hydrocarbons and finance, A number of tax benefits will be eliminated, such as preferential rates for companies in the tourism sector, exemptions for companies in the orange economy, among many others.
“In the case of Colombia, in addition to the risk of recession, we have the risk of high inflation; and if these two things are combined, we could be falling into the worst scenario that we economists can imagine, which is the risk of being able to fall into stagflation”said Bruce Mac Master, president of Andi.
The tax panorama, added to inflation above 12% and a devaluation of the Colombian peso against the dollar that exceeds 24.8%, making it one of the 3 most devalued currencies in Latin America, generates a highly volatile, uncertain, complex environment and ambiguous (known as the VUCA context) that poses great challenges when making strategic decisions for operating and investing in companies.
However, it is well known that great opportunities emerge from great crises, because people change, and so do their needs and problems, opening space for new value propositions and innovations.. History shows that companies like Uber or Airbnb were born during and thanks to the 2008 crisis, when thousands of unemployed people needed to generate income and could do so by renting their rooms or cars, Dropbox also did it in that year; and so did Electronic Arts in 1982, General Electric in 1892, General Motors in 1908, and even Disney in the great depression of 1929 to entertain a hopeless world.
Well then, “It is evident that it is under this complex scenario that we are living where innovation and entrepreneurship, especially corporate entrepreneurship, become highly relevant and become an opportunity for companies to dare to invest in nurturing their current competitive advantages and develop those of the future, taking advantage of the new possibilities that derive from all this wonderful, but painful chaos”, says Sebastian Castrillon.
This call to invest in innovation in times of crisis is difficult to assimilate, but its importance is evident with the current figures of the business sector. According to the latest report delivered by ANDI, although 81% of the country’s large companies still do not have a formal vehicle for investment in Startups (high-impact ventures), there are currently at least 31 corporate venture capital funds ( known as CVC – Corporate Venture Capital) formally structured that invested more than USD 3.7 million in startups during the last year to carry out corporate innovation projects, including some intrapreneurships. In pre-pandemic times, that is, “pre-crisis”, this figure was less than 10 funds.
In turn, Estratek reported the administration of more than USD 3.5 million dollars of corporate investment in intrapreneurship projects with which more than 38.5 million dollars in profits were generated in the last 3 years for those companies that they have opted to capitalize on the new opportunities posed by the covid 19 pandemic, the social unrest of 2021, the container and raw material crises, among others; demonstrating that this type of investment can generate significant returns in the medium term with profound long-term transformations in business models.
Well goes the saying “In times of rain, some run to hide and others go out to sell umbrellas”, which indicates that it is now that Colombian companies must, instead of retreating, bet on developing innovation projects, on starting new businesses that serve new segments and on collaborating with entrepreneurs to create more value and business fabric, all with the objective to be up to the changing needs that are required in the market.
Finally, “It is important that the Colombian business community decides to use all this adverse macroeconomic inertia in its favor to reinvent itself, find new growth routes, diversify the portfolio of products and services, open new lines of business, take advantage of materials that are underused, conquer new markets for benefit from devaluation, and many other possible ways to continue growing and transforming through intrapreneurship, a practice that has already been spreading in the Colombian business ecosystem in recent years”Castrillon concluded.
