Can we expect ‘cautious optimism?’
The year 2023 will begin with a host of inherited problems from the outgoing year. January is a time for looking ahead and forecasting or making predictions of what is coming down the line. However, unpredictability has increasingly been the norm, meaning that we have become accustomed to living in a state of almost suspended animation. No-one is quite sure which way is forward and indeed whether they should move in that direction. At this point, it’s safer to make short term assumptions rather than long term predictions.
Economic forecasts, inflation, the cost of living and political and financial volatility will all continue to dominate the news agenda. Instability and social unrest are also likely to be continuing themes through 2023. The political weather forecast is hard to predict but with elections in the UK and US not scheduled to take place until 2024 things may be a little calmer – relatively speaking.
What does this mean for business?
The key to answering this question is in understanding consumer attitudes and how they have changed. The dominant thinking is that attitudes and values have been changing over the last few years. There has been a slow attrition of wants and needs as people’s lives have adjusted and we have all started to question what is really of value. If we look back to pre-pandemic levels, spending may not have changed but attitudes have shifted significantly.
This can be seen in many sectors of the economy and is blatantly evident at the mid - low sectors of the market as incomes are squeezed. Even for the UHNW luxury consumer spending habits have changed. In fashion, it is cooler to look a little more dressed down and nonchalant, less flashy and more relaxed. There has been an incessant rise in the popularity of ‘vintage’ clothing and ‘up-cycling’ – even amongst the well-healed. The days of overt displays of ostentatious wealth no longer feel appropriate. Spending may remain the same but consumption will continue to go down.
Certain industries are the benefactors of changed attitudes and priorities - namely the health and wellbeing sector, luxury travel and lifestyle. Nutrition, supplements and personalised health and fitness programmes are where the wealthy are choosing to spend their money – even as they travel the world by private jet.
Technological innovation and the development of AI will continue to impact all industries and areas of our lives and will remain a topic for discussion and division whilst the restructuring of industry and society is in process. However, the conversation may shift to more humanitarian issues as we remind ourselves of the importance and benefits of being human.
What is unlikely to change in the coming year are the issues driving the social, political and corporate agendas. We will continue to hear about the environment, climate change and technology – including the rise and fall of crypto currencies. In the corporate world, no strategy will be complete without reference to diversity, sustainability inclusivity and the drive to be carbon neutral.
So where does this leave our assumptions for 2023?
Metaphorically speaking, if 2022 left us on the edge of a precipice, 2023 is the year that we start to devise and plan how to build the bridge to the other side.
It will be a year of transition where progress is interspersed with set-backs. We will start to see new ideas and new structures for businesses, corporations and even political governance, but will probably find that by the end of the year, not much has been achieved. We may, however, start to get a glimpse of how the future might look. We will begin to see how we can shape a new era based around technological innovation, but also the sharing of ideas and more co-operation within businesses and governments both locally and globally. Businesses and organisations may start to recognise the benefit of broader, flatter management structures, enabling inclusivity in all senses of the concept.
There may even be cause for cautious optimism. We have become accustomed to sudden, unexpected events (pandemics, wars, energy crisis, stock market crashes) so it seems almost unthinkable that we may have an unexpected event that changes things for the better. If we are bold enough to look as far ahead as the end of 2024, then we may even start to expect good outcomes.