Businesses have been urged to develop their strategic plans based on the current evolution of society as six emerging megatrends are predicted to shape the global economic future.
The Ashurst Future Forces 2023 Report reveals that corporates, governments and other institutions will need to make significant changes during the next decade in order to be successful.
The research, conducted by Economist Impact, identified the megatrends as: Changing Global Dynamics; Net Zero Transition; Digitalisation; Demographic Change; Skills for the Future and, Resilient Cities.
The findings were drawn from a February-March 2023 international survey of 300 senior executives, with 62% from medium-sized businesses (250-1999 staff) and the remainder from large organisations of 2000 or more employees.
Ashurst Global CEO Paul Jenkins said Future Forces identified that “businesses must understand the deeper and underlying currents that are driving the way societies are evolving” in order to make informed plans about the future.
“At a time of geopolitical, economic and financial uncertainty, it has never been more important for businesses to plan for the future,” Mr Jenkins said.
“Global conflict, lack of supply chain security and the end of an era of low interest rates are just some of the challenges confronting corporates in 2023. A deeper appreciation of the forces behind societal change is more critical than ever.
“Businesses that take time to recognise the megatrends will be better prepared to face the challenges the coming years will bring.”
Key report findings included:
Demographic change was top challenge
More executives expect their organisation to struggle with shifting population demographics than any other megatrend. Concerns revolve around not just the impacts of an ageing population but also meeting increasing employee bargaining powers and staff demands for flexibility.
Enthusiasm for creating resilient cities
Operating in large cities may be increasingly challenging, but there is a consensus across industries that they also pose attractive business opportunities. There was a prominent need to modernise the built environment and civil infrastructure, such as roads and utility networks, to improve energy efficiency and climate resilience.
Executive unease about megatrends
Two-thirds of respondents said their business was yet to give the megatrends sufficient attention and few believed their organisation had capability to tap opportunities on offer. More than 80% said innovation capacity, adaptiveness, resilience and employee skills were insufficient and 97% believed the same about their technology capabilities.
Skills for the future, digitalisation and net zero transition are key
These three megatrends were revealed as cross-cutting, influencing each other and all other megatrends. Success in an increasingly digitalised and sustainability-focused world would require upskilling, reskilling and a fresh perspective on the role of people. The use of artificial intelligence (AI) and the Internet of Things (IoT) would be integral to help businesses decarbonise and cities to build climate resilience.
Sustainability is pervasive
More than a quarter of businesses said transition to net zero posed the most attractive opportunity but also the toughest challenge. The need to improve sustainability was a prominent driver of business change, colouring discussions on skills needs and technology opportunities, while figuring in expectations of regulatory change. Respondents believed that financial climate disclosure, supply chain transparency and other ESG-related rules were more likely than other regulatory developments to impact their business over the next decade.
Responding to the key findings, Mr Jenkins said that it was now crucial for businesses to think beyond the immediate issues they faced.
“Some of these megatrends may already be part of planning strategies; others are only beginning to be understood,” he said.
“It is vital however that businesses focus their attention on all of them if they are to navigate the future with confidence.
“Of the six, changing global dynamics and the drive to net-zero are already having a significant impact on business and the community; while the scale of challenges from digitalisation – notably generative AI – are only now becoming evident.
“The other three trends – the impact of demographic change, the need for workforces to build new skills, and the development of resilient cities – are not yet well understood. And as the research indicates, too little attention is being directed to understanding the impact they will have on the corporate outlook.”
Mr Jenkins said it was important that governments and businesses took the time to identify what was over the horizon, the timing of when these trends would hit, and how they might shape the global corporate environment.
Download the Ashurst Future Forces 2023 Report for more information on the survey and the data that was collected.
