As we've talked about here in another column, the fast-paced, hyper-connected world is increasingly BANI - Fragile, Anxious, Non-linear, Incomprehensible, but at this time when "a year ends and begins again" it's inevitable that we start thinking about what awaits us in the New Year. Increasingly, the role of the executive of any function is also that of a futurist, with a keen eye on today's transformations and their impact on tomorrow.
With all due respect to the increasing impossibility of understanding the infinite global changes and their consequences, I'm going to share with you here today some of the things that will be on my radar in 2022. I believe that these will be themes that will define and guide the year in general and whose ramifications and impacts will be felt in all sectors of the economy and business.
Inflation:
The ghost of inflation has returned. All Brazilians who remember the 1980s and 1990s know the profound impact that the years of hyperinflation had on the Brazilian economy, society and culture.
But while we are far from having the terrible inflationary figures of the pre-Real era, this time the phenomenon is global and even economies like the US and Europe are feeling its effects.
Problems in the global supply chain and record monetary stimulus by central banks have led to this situation, but its consequences are profound. This new scenario needs to be very well reflected in the plans for 2022, as it has a major impact on families' purchasing power. In this scenario, consumption decisions and price sensitivity are greatly affected.
Once thought to be a "transitory" effect due to the economic woes of Covid, more and more experts agree that it is here to stay.
Interest Rates, Venture Capital, Innovation:
With the need to curb economic stimulus, central banks are signaling the end of the "era" of quantitative easing and an increase in interest rates. In addition to the direct financial consequences for your business and capital structure, the impact can also be great on innovation.
Undoubtedly, the very low interest rates in the developed world over the last decade have generated a transfer of capital in search of more profitability and risk. This has contributed greatly to the growth of Venture Capital investments around the world and this money has flowed directly into accelerating innovative startups around the world (and taking the multiples involved in the valuations of these same companies to stratospheric levels). With the recent increase in rates, some of these trends have already begun to be reversed. The end of the great VC boom? Impacts that will reduce access to capital for new companies and slow down the pace of innovation? Or just a temporary market adjustment?
Geopolitics:
The geopolitical climate is heating up. The US and China are raising the tone of their speeches and promoting increasingly hostile concrete actions. Meanwhile, there is growing fear of confrontation over the difficult issue of Russia, Ukraine and NATO. In addition to the threat of confrontation, geopolitics is increasingly impacting the economy in a world where production chains are increasingly globalized through sanctions, taxes and blockades.
Big Tech regulation and privacy:
There is a growing political movement in the United States calling for more regulation of big tech. In the social world, Facebook and Twitter have been under a lot of pressure following the US elections, the incidents of January 6th, the difficulty of guaranteeing legitimacy in information linked to Covid, and the growing reports about the effect of media on the development and self-esteem of children and adolescents. Pressure is growing for platforms to moderate content and Twitter recently implemented changes shortly after announcing the departure of CEO Jack Dorsey.
On the e-commerce side, Amazon has also been under pressure due to working conditions, problems with unions and also from antitrust bodies.
Critics say that the technologies developed in recent decades have had perverse side effects on our social fabric and that giving absolute power over information and the concept of truth to a few billionaires is dangerous and undesirable. On the other hand, supporters of the model believe that bringing in state intervention would curb innovation and would be an even greater risk to freedom of expression.
Is the future of big tech platforms to continue as a private, less regulated arena? Or a "public square" where common rules should dictate coexistence and the terms of engagement?
This is one of the great global debates of the moment and we will feel its impact for decades to come.
Metaverse:
I leave you with Eduardo Abritta's column (https://themakers.com.br/o-que-esperar-metaverso/) on the subject. Is Facebook going to be a pioneer in accelerating a new wave of digitalization that goes beyond Social and will allow for various opportunities to digitalize interactions? Is this all just a corporate rebranding to escape the regulations described above? Or is it a ploy to get Facebook to own the operating system operating system and escape its current dependence on Apple (whose recent decisions on privacy have severely impacted the business model of its platforms, revealing the conflicts between the two giants).
This is certainly a movement to follow closely.
NFTs:
I'll leave another of Eduardo's columns to talk about NFT (https://themakers.com.br/nfts-gamification-e-avatares-gerando-dialogo-atraves-do-mundo-virtual/). The speed with which this technology has been adopted as a tool for digitizing intellectual property has been impressive, and it has the potential to cause major disruption in areas such as fashion, sports, the arts, the real estate market and many others. Similarly, many point to the formation of speculative bubbles caused by the same excess liquidity mentioned above in the Inflation chapter, and the NFT market, which already moves more than 2 billion dollars a month, has led to very dubious valuations for many works of art.
After having grown by 38,000%, 2022 will be the year when this technology matures, the market adjusts and the initial adoption curve is overcome.
DAOs:
Decentralized Autonomous Organizations present themselves as an alternative for the organization of the future. In this system, users cooperate in an organization with smart contracts where all the rules are transparent. In practice, it works like a company or an NGO, but 100% decentralized.
DAOs made a splash this year when a group got together through Constitution DAO and raised 40 million dollars to buy one of the 13 original copies of the US Constitution. In the end, they lost out by 3 million to the winning bid, but it was enough to prove that this crowdfunding format can be revolutionary by empowering the small investor.
In addition to raising and organizing consumer power (as in the case of the Constitution), the format may also prove to be a winner in managing large-scale organizations. Will we all be working in a DAO in the future?
Great Resignation - Passing or Permanent Effect?
During the pandemic, many people have re-evaluated their life and career choices, and the result has been unprecedented levels of turnover in several global sectors. In the United States, the average annual turnover reached 3.4% per month and even top companies like Amazon lost almost a third of their workforce in a year.
The data, like everything else in the post-pandemic world, is confusing. Some point to a temporary effect, also accelerated by government monetary stimulus. Others, a change in paradigm and relationship with work that will last for years.
The year 2022 will be very important for us to really understand what is happening in the new labor relations. The impact could be huge. If we do indeed see a large slice of the global workforce completely changing their relationship with the office, career and life priorities, the organizational and economic effects of this will be a real tsunami.
Gen-Zs not so young anymore
Looking at Generation Z is nothing new, but until now it was always from the perspective of consumers or creators of content and culture. However, the oldest members of this generation are now 26 years old and this means that they are starting to gain financial independence and make big economic decisions. In addition, they are entering the job market and are the first generation of digital native workers. This means that 2022 will be an important year for us to learn more about what GenZ will be like beyond Tik Tok, as the generation that pays bills, clocks in and manages people.
Some data already shows the size of the generational gap we will be experiencing. To begin with, 80% want to be their own boss and 50% plan to start their own business. The most entrepreneurial generation in history.
Understanding the true impact of the arrival of Gen Z on the job market is something to keep an eye on for 2022.
And now...
The biggest difficulty for business plan is always to keep an eye on the big macro movements, but not to forget that execution happens in the micro. It's not productive to paralyze a business waiting for an election year, just as you can't forget that there are global macro movements.
If the Year of the Tiger 2022 begins full of doubts and ruptures, it also begins full of promises and, as we'll hear in that incessant song... "the future has already begun...".
