Ten global business challenges in 2024

2023 was exceptionally challenging for many businesses, and 2024 will likely
be another year of uncertainty. So, what are the macro trends that will have
the greatest impact on business? Here are my ten predictions for this year
across geopolitics, economy, and technology.
Prediction 1: Continued deglobalization: The global shift towards
deglobalization, spurred by the 2008 financial crises, trade conflicts, and the
recent pandemic and geopolitical tensions, is set to persist. In response,
nations and businesses will prioritize regional partnerships and local supply
chains for stability and growth. Notably, China's export restrictions on rare
earth metal technologies, along with Western sanctions, are reinforcing this
trend, compelling a strategic realignment of international trade relationships.
Prediction 2: Grouping of supply chains into political interest
spheres: China's role as the top global exporter is waning as the U.S. seeks to
decrease reliance on Chinese manufacturing and India emerges as a
competitor under Modi's industrial-focused regime. Sanctions on Russia
accentuate this shift, leading to politically aligned supply chain clusters.
Europe must adapt its supply chains accordingly, while smaller nations find
new opportunities within these evolving trade blocs.
Prediction 3: Intensification of high-tech competition: As supply chains
localize, high-tech competition escalates. In 2023, China's microchip
production surged, supporting its tech sector, and Huawei emerged as one of
the top global providers of cloud computing services. China's electric vehicle
(EV) advancements are also notable, and China even overtook Japan to
become the largest car exporter in the world. Chinese manufacturers have set
new standards in the field of electric motor design. At the end of last year,
Xiaomi launched its SU7 electric car, which is better than Tesla's most
modern S Plaid car by all technological parameters.
Meanwhile, the U.S. leads in AI and computing services, with giants like
Amazon and Google. Europe lags, maintaining pace only in pharmaceuticals
and green technology development, indicating a significant competitive
divide in the high-tech landscape.
Prediction 4: Global economic uncertainty: Despite exceeding
expectations in 2023, global economic prospects for 2024 are fraught with
uncertainty. Non-tech sectors are particularly vulnerable to profit declines
and funding challenges amidst stricter solvency criteria. Concurrently, China
grapples with a looming crisis, job losses, and deflation risks. This volatility
is anticipated until the U.S. elections, potentially altering current trajectories.
In this context, companies must focus on profitable growth and implementing
technologies that boost productivity.
Prediction 5: Fall in reference interest rates: 2024 anticipates a decrease in
reference interest rates globally to boost economic growth, starting with
developing nations and extending to the U.S. and Europe. While the cost of
money will drop, funding accessibility won't necessarily improve due to
creditors' emphasis on solvency and profitability. Lower interest rates may
inflate stock and luxury real estate prices, yet consumers will likely still face
the pinch of high living costs and escalating prices for goods and services.
Prediction 6: Gradual recovery of IPOs and M&A: We will likely see a
gradual recovery of IPOs and M&A deals, generating a good climate for
investments and financing of companies that strategically expand through
consolidation, as well as those that intend to obtain necessary funds through a
stock market listing.
Prediction 7: Further increase in social inequality: Social inequality is set
to deepen, with surging prices in essentials like food and energy
disproportionately impacting the poor. Climate change exacerbates this
disparity, especially in equatorial countries facing environmental disasters.
While the wealthy may be less affected and could benefit from falling interest
rates, this growing divide heightens social tensions and could fuel the rise of
extreme right-wing movements.
Prediction 8: Mobilization of resources towards green
technologies: Further rise in global temperatures will cause massive
difficulties for humans, flora, and fauna. Unfortunately, this year is expected
to see further global warming and strengthening of the El Niño phenomenon,
resulting in extreme events like floods, intense heat waves, and cold spells in
some countries.
These trends impose on countries the task of increasing their efficiency in
managing climate crises and developing defensive mechanisms, as well as
accelerating their mobilization towards green technologies. A significant
mobilization of resources towards new, improved green technologies is
needed, both in the public and private sectors, potentially leading to a new
wave of technological development.
Prediction 9: Wider application of Generative AI: The application of
generative artificial intelligence will increase worker productivity in
marketing, content writing, automated processing of customer requests, and
customer service, where AI agents will be able to autonomously perform a
large number of tasks.
AI agents will also help people access necessary information and knowledge
more quickly and formulate responses to customer questions in a much
shorter time. In areas of internal knowledge exchange and knowledge
extraction in companies, the application of generative AI will significantly
increase productivity.
Prediction 10: The transformation of customer experience: The customer
experience landscape is poised for transformation in 2024, with a shift away
from traditional emails and phone calls to chat and rich messaging platforms
like Viber, WhatsApp, and iMessage. This change, enhancing productivity in
marketing and support, will significantly influence sales by year-end.
Companies must prepare for a digital evolution that integrates AI with these
messaging tools for direct customer engagement, catering especially to the
preferences of the younger demographic.
In summary: This year will be full of challenges. Deglobalization,
deepening geostrategic divisions, and intense climate change are problems
the world must face. Constructive use of new technologies and artificial
intelligence can help us on this path.

Summary:

The article provides ten predictions for the year 2024, focusing on macro
trends in geopolitics, economy, and technology. Here is a brief summary of
each prediction:

1. Continued deglobalization: The trend of deglobalization, driven by

factors like the 2008 financial crises, trade conflicts, and the recent pandemic,
will persist. Nations and businesses will prioritize regional partnerships and
local supply chains.

2. Grouping of supply chains into political interest spheres: Supply chains

will align with political interests, with China's role as a global exporter
diminishing and India emerging as a competitor. This shift will lead to
politically aligned supply chain clusters.

3. Intensification of high-tech competition: As supply chains localize,

competition in high-tech industries will escalate. China's advancements in
microchips, cloud computing, and electric vehicles will challenge the
dominance of the U.S. in AI and computing services.

4. Global economic uncertainty: The global economic prospects for 2024

are uncertain, particularly for non-tech sectors. Stricter solvency criteria and
challenges in funding may impact profitability. China also faces a crisis and
deflation risks.

5. Fall in reference interest rates: Reference interest rates globally are

expected to decrease to boost economic growth. However, funding
accessibility may not improve due to creditors' focus on solvency and
profitability. Consumers may still face high living costs.

6. Gradual recovery of IPOs and M&A: The year will likely see a gradual
recovery of initial public offerings (IPOs) and mergers and acquisitions
(M&A), creating a favorable investment climate.

7. Further increase in social inequality: Social inequality will deepen, with

rising prices impacting the poor disproportionately. Climate change
exacerbates this disparity, potentially fueling the rise of extreme right-wing
movements.

8. Mobilization of resources towards green technologies: The need to

address climate crises and global warming will lead to increased investment
in green technologies in both the public and private sectors.

9. Wider application of Generative AI: Generative artificial intelligence

will be increasingly applied in marketing, content writing, customer service,
and knowledge extraction within companies, enhancing productivity.

10. Transformation of customer experience: The customer experience

landscape will undergo a transformation, with a shift towards chat and
messaging platforms. Companies need to integrate AI with these tools to
engage customers effectively.

Overall, the article emphasizes the challenges that lie ahead in 2024 and
highlights the potential role of technology and artificial intelligence in
addressing these challenges.

Resource: “Ten global geopolitical and economic challenges in 2024” Forbes

Serbia 9 Jan 2024 07:00
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