An interview with RSM Chief Economist Joe Brusuelas
We recently sat down with Joe Brusuelas, chief economist with RSM, who joined the firm in 2014, for his perspective on a number of items including economic issues impacting the middle market, innovation, what RSM clients can expect in the future and his time with the firm.
A: I was looking for a new opportunity outside of the financial sector. In my estimation, that was a sector of the economy that was likely to shrink due to increased regulatory oversight and shift in policy preference by the Federal Government. I was interested in making a contribution to the real economy, especially the middle market, which I felt for many years was overlooked by investors and not given a central focus with respect to national economic policymaking. Given the fact that the middle market accounts for 40 percent of the nation’s Gross Domestic Product (GDP) and one-third of its workforce, and the fact that RSM has been focused on providing audit, tax and consulting services to the middle market since the firm’s inception in 1926, the opportunity at RSM fit my preference in just about every manner one could ask.
A: The primary focus in the first year was development of the RSM economics thought leadership platform, which primarily consisted our two major products: The Real Economy and the RSM US Middle Market Business Index. We had a mandate to get out on the road and present our ideas to both internal and external clients. So in that first year, I spent quite a bit of time on the road at events, presenting our economic outlook and expressing our view on a wide range of topics that impact the middle market.
Since the first year, we have moved beyond that to helping facilitate RSM’s presence in Washington D.C. and building relationships in Congress, the agencies and the executive branch to share how various policies impact the middle market and the economy.
More recently, we have begun building a new industry-focused program that we believe will be a major game changer inside and outside of RSM. Stay tuned because we think that over the next three years this program will be a magnet for RSM talent interested in broadening and deepening the careers at the firm in way that leads to a wealth of opportunities. More importantly, these individuals will have the opportunity to shape the outlook in and across industries as it applies to the pace and intensity of technological change, how it impacts our clients and our people. In many ways this is what Shakespeare referred to in Hamlet as the “Undiscovered Country.” The change that is coming linked to technology, the way it impacts our clients, our people and our country is the major event our time.
A: The middle market is best understood as “firms with big company problems and small company resources.” They are always sensitive to movements in prices – be they the costs for basic inputs or movements in interest rates linked to decisions by the Federal Reserve. One of the major things we have discovered via the RSM US Middle Market Business Index is that our clients and the middle market in general are incredibly sensitive to policy shifts out of Washington, D.C. With larger firms able to wield influence in our nation’s capital via campaign contributions and the tendency of policymakers to at least give consideration to the interests of smaller firms, the middle market is frequently overlooked when it comes to the setting of public policy at a Federal, state and local level. This is why RSM’s unique insights into the middle market are so valuable to policymakers..
A: Middle market business leaders are starved for economic and policy information they need to make solid forward-looking capital allocations and hiring decisions that impact their firms. At RSM, we continuously strive to be the first-choice advisor to the leaders of middle market businesses, which are truly the heart of the real economy.
A: The most important thing that RSM’s thought leadership brings to our clients is the transmission of sophisticated and often difficult-to-understand economic and policy developments in an accessible fashion. We are taking a lead role in establishing the voice of the middle market. For example, RSM has been instrumental in voicing the need for tax reform, not only for corporations, but also for pass through businesses. We are pleased to see that the Tax Cuts and Jobs Act is offering tax-saving opportunities for many of these business entities. We have also stressed the desire of middle market firms to participate in global commerce in a more intense fashion, and we are pleased to see a special section dedicated to creating opportunity space for small and medium enterprises, including regulatory oversight, in the ongoing NAFTA modernization talks. These are just some of the more encouraging developments vis a vis policy and the middle market.
A: RSM is now recognized across the country and in the nation’s capital as the pre-eminent voice of the middle market. We have taken an idea organized around thought leadership and executed on that business goal within the integrated strategy of the overall firm. At RSM, our focus has always been on the middle market – on truly understanding the unique challenges and opportunities those companies face so we can provide those business leaders with the information and insights they need to succeed. We’re continuously looking for ways to add more value to the middle market, and it’s fulfilling to see the positive results from those efforts.
A: Without giving away too much, it’s industry focus. Our new program will add value to our existing thought leadership program and products and, over time, lead to the innovation of new ones. I anticipate that what we build inside the program will contribute in a significant and meaningful way to the strategic direction of the firm well beyond industry analysis. Our clients can expect to see RSM’s continued commitment to the middle market, and for us to be on the leading edge of innovation so we can provide them the best possible business advice in an ever-changing world.