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The rate of new business creation has exploded during the pandemic. Entrepreneurs responded to the immense opportunities they saw as the economy underwent seismic change. Recently, the World Bank announced that we were entering a period of 1970s-style stagflation, with stagnant growth and high inflation. Those who know their company’s history know that many great companies have emerged from economic crises. There is no doubt that as the economy undergoes another seismic shift, entrepreneurs will seek to start new businesses, and those already in business will seek to transform theirs to seize the opportunities ahead. Here are six key trends that will shape the future of business.
The rise of millennials
Millennials have become the largest living generation in the United States. Companies that want to be big players in tomorrow’s economic landscape must win with millennials. According to a McKinsey & Company report, millennials spend $1 trillion a year and are expected to post an income of $8.3 trillion by 2025, compared to $6.4 trillion for Gen Xers and $1.1 trillion for Baby Boomers.
Companies must adapt to the tastes, habits and values of Generation Y if they want to succeed. They also need to adapt their strategies to win over the right segment of millennials for their business.
Earning millennials isn’t just about creating and retaining customers, it’s also about hiring millennial employees. So social media platforms, schools, and training should be used, not just to create and retain customers, but also to attract the talents of Generation Y.
A more demanding employment pool
The population is growing at an increasingly slow rate and, as baby boomers retire, the labor pool will shrink. The impact of a shrinking labor pool shifts more power to workers. We’ve already seen companies treat remote work as the new signing bonus. The Great Resignation further reduced the labor pool, as workers decided to start their own businesses. Companies are under immense pressure to adjust their compensation, working hours and working models to remain attractive to workers.
We see companies struggling to incorporate remote and hybrid working models into their businesses. Not every business can go remote or hybrid. However, the success of companies such as Dropbox, Twitter, and Slack show that it is possible to build a large, successful business with remote workers. Where they can, workers will choose companies that offer this. This is all the more important as people migrate from cities in search of better living conditions at lower cost.
The Great Resignation also showed that many workers felt underpaid. This has pushed companies to offer better compensation. However, better pay isn’t the only form of compensation people are looking for: workers want a better work-life balance.
A more diverse population
Millennials are the most diverse demographic group in the United States, both due to immigration and the growth of minority populations.
Companies will need to learn the cultural languages of the communities they seek to target. Erin Meyer’s research shows the gains a company can make by investing capital to understand how to navigate the cultural minefield. Failure to understand where your employees and target communities fit on a culture map can result in a failure to manage effectively, or a failure to effectively create and retain a customer, or attract employees.
Being able to communicate across cultures is an increasingly important tool for managers. Companies like Netflix have invested heavily in training their managers and staff according to cultural maps to be more effective.
Related: Is This Industry The Future Of Entertainment? If so, there is still room for innovation.
The rise of platforms
Platforms are online marketplaces that connect consumers with suppliers. Think Airbnb, Uber and Amazon. Large corporations today are mediated by the internet and match demand and supply in very similar ways.
Software has eaten up virtually every type of business in the world. If your business wants to succeed in this new era, it must also go through the Internet and software. It goes beyond having an online presence – at this rate, not having an online presence is abnormal – improving search engine optimization (SEO), or even becoming a company that measures and tries everything to improve. You have to reimagine your business and disrupt it to keep up.
Related: Want to see the future? Six founders share their secrets to making savvy business forecasts
AI is eating the world
Not only has software been eating up the world for over a decade, but artificial intelligence has also begun to eat up the world, disrupting countless businesses. You may not realize it, but you are constantly in contact with some form of AI. Any task that can be automated should be, and AI is how.
To put your business on the path to automation, you must first understand the processes that drive the business and determine which aspects are open to automation. By mapping and analyzing your processes, you can then find the technologies you need to transform your business.
It is important to engage your employees because they have an intimate understanding of the tasks that can be automated. If you don’t engage with them, they may not find your solutions helpful, making the whole process a mistake.
The emergence of big data
Data is today’s oil. This depends on the importance of the Internet and software. The Internet naturally collects and propagates data. Companies that succeed in uncovering actionable insights from the volumes of data their systems naturally create can derive enormous value from that data, especially in predicting future business trends.
Data can help your business better understand your customers, personalize offers to those customers, and become more efficient. No business can succeed without some sort of policy to maximize the use of its data.
Related: Why the Creator Ethic is Key to the Future of Work
