How to profit from major forces shaping 2024
The year 2024 promises to be a watershed moment, characterized by significant shifts across economic, political, technological and environmental domains. For business owners, CEOs and business leaders, the ability to effectively navigate these complex dynamics will be instrumental in steering their organizations toward a prosperous and sustainable future.
Why should you care?
As a business leader, why should you care about any of the trends that are shaping the world and its economies in 2024? The answer is simple: If there is a major observation that my team and I have made in conducting corporate strategic planning sessions for companies around the world in every industry, and reviewing plans and strategies of companies of all shapes and sizes, it is that the vast majority of companies pay far too little attention to trends.
Trends are the major forces that are shaping industries, impacting consumers, driving customers, governing supply chain costs and dictating if and where you will have a market. It does not matter what industry you are in or how big your company is; you have to obsess about trends. Day and night. Year in, year out. Now even more than ever before.
Why? Because technology, artificial intelligence (AI), the postpandemic world, changing consumer habits and global conflicts have made sure that change is now happening faster than ever before in history. If you do not obsess about trends, consider the long list of corporate failures in history: from Blockbuster to Kodak, BlackBerry, Toys “R” Us and Sears.
As a business leader, you have to obsess about trends and teach your teams to do the same.
Overview of the major forcesIn 2024, a deeper analysis of the major forces shaping the global business and economic landscape reveals a complex interplay of elements that will demand strategic agility and foresight from business leaders.
1. Economic cycles and debt dynamics
The global economy is expected to continue its dance with the dual forces of cyclical economic fluctuations and evolving debt landscapes. Understanding the nuances of these cycles, particularly how they impact investment, consumption and fiscal policies, will be crucial. CEOs and business owners must monitor interest rate trends, government debt policies and consumer spending patterns to navigate these cycles effectively. The challenge will be to balance growth objectives with the need to maintain financial resilience in the face of potential economic downturns.
2. Technological advancement and AI
The relentless pace of technological innovation, particularly in the realm of AI, machine learning and data analytics, is set to redefine industries. Businesses that can effectively leverage these technologies will gain a competitive edge in efficiency, customer insights and product innovation. This era will also see the rise of new business models driven by technology, including the proliferation of digital platforms, the gig economy and blockchain applications. Staying abreast of technological trends and investing in digital transformation will be key for businesses looking to capitalize on these advancements.
3. Political, geopolitical shifts
The global political landscape in 2024 is likely to be marked by heightened tensions and shifting alliances. Trade policies, regulatory changes and international relations will have direct implications for global markets. Businesses will need to be adept at navigating these changes, which could involve shifting supply chains, reevaluating market entry strategies and staying compliant with new regulations. Particularly important will be the ability to anticipate and react to geopolitical events that could disrupt global trade or create new opportunities in emerging markets.
4. Israel-Hamas conflict
While not a global conflict, the repercussions have global effects, even if they are not direct. What do I mean by that? Houthi attacks in the Red Sea have impacted shipping in the Suez Canal, driving up supply chain costs for a range of companies up to 20 percent.
In late 2023, the Houthi group in Yemen targeted commercial ships in the Red Sea’s southern region, leading to a rerouting of several vessels. As a result, these ships were avoiding the usual passage through the Suez Canal at Egypt’s northern end, which connects to the Mediterranean Sea. The Houthis, aligned with Iran, claimed these attacks support Palestinians amid the conflict between Israel and Hamas. This shift in shipping routes resulted in increased costs and extended travel times for the vessels. Consequently, a notable rise in oil prices and insurance premiums for war risks ensued.
5. Climate change and sustainability
As the realities of climate change become increasingly undeniable, businesses will face pressure to adopt sustainable practices. This shift presents both challenges and opportunities. On one hand, companies will need to invest in sustainable operations to comply with environmental regulations and meet consumer expectations. On the other hand, this shift toward sustainability opens up new markets in renewable energy, sustainable products and green technologies. Forward-thinking companies that can innovate in these areas are likely to find new avenues for growth and profitability.
6. Global elections
In 2024, over 60 countries are holding elections, including the United States, India and South Africa. This means around 4 billion people will have new governments; that is half of the world’s population. Because the global wealth gap between rich and poor is as wide now as it last was in the 1930s, this gives rise to populism in a lot of countries. It will be crucial for business leaders to monitor how these elections play out. Why? Because the more populist an elected leader is, usually the more irrational and economically unsound the political decisions can be, just to satisfy voters.
How to profit from these trends
First of all, what are the right questions to ask yourself as a business leader? The first question is: How can that impact my business? How can that impact my customers? How will they change as a result of this? Will this impact their behaviors, and how? How will this impact my costs or not? Will this open up new opportunities for me and my business? What would these be? Could any of these changes create unforeseen enemies for me and my business?
You have to cultivate a healthy sense of paranoia if you want your business to survive and thrive in rapidly changing times, and if you want to constantly make use of new profitable opportunities.
If you do not ask the right questions, you will not get the right answers. The quality of your questions determines the quality of your answers.
You have to make it a regular habit to address these questions with your team. This will train your mindset and that of your people, to mitigate the negative consequences early and to profit from opportunities before your competitors do.
Tom Oliver, a “global management guru” (Bloomberg), is the chair of The Tom Oliver Group, the trusted advisor and counselor to many of the world’s most influential family businesses, medium-sized enterprises, market leaders and global conglomerates. For more information and inquiries: www.TomOliverGroup.com or email Tom.Oliver@inquirer.com.ph.
