08 January, 2024

Business as Unusual: RFI’s thoughts on 2024

Steering into 2024, we find ourselves at a crossroads of change and continuity, where the familiar patterns of business collide with unprecedented trends and technological leaps.

This year, business won’t be as usual; it will be a test of agility and foresight. As geopolitical tensions simmer and trade wars rage, companies worldwide must navigate a labyrinth of uncertainty, with the US and China at the heart of the maze. Meanwhile, generative AI takes the spotlight, altering the essence of job roles and demanding a workforce fluent in AI literacy.

Amidst this transformative landscape, we stand on the brink of a year that promises to be as challenging as it is exciting, with businesses and individuals alike needing to adapt swiftly to the evolving environment.

Economic Uncertainty

The world economy is apparently stable after volatility during the pandemic, with the US stock market soaring high after a few years of pearl-clutching about the prospect of a recession. Experts seem to agree that a soft landing is on the cards, but of course the US presidential election is a wild card. For companies that rely on working with multinationals based in the US, this will be a bumpy year.

A Trump win could be business-friendly for US enterprises and their stock market, not so much for the rest of the world, especially China. Geopolitical tensions will continue to sour for years to come, with proxy wars, sanctions, and cyberattacks escalating. Businesses that operate across borders will face increased uncertainty and risk.

China’s economy will continue its slow path to recovery but reports of its demise by the western media seem to be overblown. It remains the world’s second-largest economy and a major driver of global growth. Nonetheless, consumption continues to be cautious and sluggish, as Chinese consumers remain wary of the pandemic’s lingering impact, and the real estate downturn.

Businesses in Asia will need to proceed cautiously, while they navigate the complex and dynamic regional landscape. Opportunities abound in emerging markets, such as India, Thailand, Indonesia, and Vietnam, but so do challenges, such as infrastructure gaps, regulatory hurdles, and social unrest.

Businesses will need to be agile, adaptable, and resilient to thrive in 2024:

Stay informed about the US presidential election developments, understanding that outcomes can significantly impact global economic policies and market sentiments.
Reduce dependency on a single market by diversifying into other regions to mitigate risks associated with geopolitical uncertainties, particularly US-China relations.
Maintain a balanced view on China’s economic status, recognizing its slow recovery while also acknowledging its continued influence on global growth.
Encourage innovation to adapt products and services for local markets, taking into account regional preferences and consumption patterns.
Prioritize cybersecurity to protect against the increasing threat of cyberattacks amidst escalating geopolitical tensions.

AI at Work

Generative AI will continue to take center stage as a new technology that is actively transforming the way we work, live, learn, and play. The disruption to jobs will accelerate, with AI skills becoming indispensable. According to a report by the World Economic Forum, by 2025, AI will have displaced 75 million jobs globally, but will have created 133 million new jobs.

Last year, Microsoft launched Copilot as an add-on to Office 365 that will significantly transform how businesses use generative AI daily. Copilot is an AI-powered assistant that can help users with various tasks, such as writing emails, creating presentations, summarizing documents, and answering questions. Copilot is integrated into the Microsoft 365 apps that millions of people use every day, such as Outlook, Word, PowerPoint, and Teams.

Many traditional job roles will pivot to new roles that require AI prompting skills. In the marketing industry, for example, copywriters will become content strategists, who can use generative AI tools, such as ChatGPT, Claude, and Gemini, to create engaging and effective content for various channels and audiences. Graphic designers will effectively become art directors overnight, who use DALL-E 3 or Midjourney to create stunning and original visuals.

Many low-level jobs that perform repetitive tasks will disappear. Many customer service roles will be replaced by chatbots that can handle common queries and requests, and escalate complex issues to human agents. Many administrative roles will be automated by AI tools, such as Copilot, that can handle scheduling, booking, invoicing, and reporting.

The demand for AI specialists, such as data scientists, machine learning engineers, and AI researchers, will remain high, as well as for AI-savvy professionals, such as business analysts, product managers, and digital marketers. AI literacy and fluency will be essential for all workers, as they will need to understand, interact with, and leverage AI systems in their daily tasks.

To ride the generative AI wave, companies should:

Foster an environment of AI literacy within the organization, ensuring all employees are comfortable interacting with and leveraging AI in their roles.
Integrate AI into their workflow, particularly with tools like Microsoft’s Copilot enhancing productivity in Office 365 applications.
Invest in training programs to help employees develop AI-related skills, transitioning from traditional job roles to those that require AI proficiency.
Develop leaders who understand the potential and limitations of AI, and who can make informed decisions on AI investments and implementations.
Establish guidelines for ethical AI use to ensure responsible deployment and to maintain public trust in the company’s use of technology.
Conduct a comprehensive audit of business data to assess availability, accessibility, completeness, governance, and security, to pave the way for AI-driven automation and analysis.

Mixed Reality and VR Gaming

At RFI we have been fans of VR since the first Oculus Quest headset. According to PwC, global VR spend growth up to 2026 is expected at 24% CAGR, bringing the segment to US$7.6B. Gaming content is the primary contributor to VR revenue, taking in US$1.9B in 2021. This should increase to US$6.5B in 2026, 85% of total VR revenue.

Mixed Reality (MR) and VR has been poised to “take off” for the past eight years now, but has never made inroads into the non-gaming consumer world. With Apple’s launch of the Vision Pro in Q1, things could change quickly. RFI has held VR meetings in Horizons Workrooms for a while, but client demand for VR experiences has not taken off yet. 2024 could be the year that Mixed Reality finally matters, even if the word Metaverse has fallen out of favor.

We expect the steady growth of MR to lead to more brands exploiting the technology in creating unique retail and Out-Of-Home (OOH) experiences, met with a consumer public that is increasingly receptive to the headsets. However, brands need to control factors that could derail their rollout, including:

Invest in high-quality, engaging content that aligns with brand values and resonates with the target demographic. Avoid gimmicky applications of MR and VR that may detract from the brand’s image or fail to add value to the consumer experience.
Ensure that MR and VR content is accessible to users with varying levels of experience and that it does not induce discomfort, such as motion sickness.
Prioritize user-friendly, intuitive user experiences that require no prior experience.
Be transparent about the collection and use of data within MR and VR environments. Implement robust data protection measures to secure personal information and build trust with users.

Diversity, Equity, and Inclusion

A study by Google found that 64% of all respondents took some action after seeing an ad they considered to be diverse or inclusive. Diversity, Equity, and Inclusion (DEI) are not only ethical and social imperatives, but also business imperatives. According to a report by McKinsey, companies with more diverse leadership teams are more likely to outperform their peers on profitability, innovation, and customer satisfaction. Moreover, consumers are increasingly aware of and influenced by the DEI practices of brands, especially among younger and more diverse generations.

The importance of diversity and inclusion in marketing will increase, as consumers demand more representation and authenticity from brands. This will require brands to understand the nuances of different audiences, segments, and communities, and to avoid stereotypes or generalizations.

To create more diverse and inclusive marketing campaigns, brands need to do more than just feature diverse faces and voices in their ads. They also need to:

Conduct market research and data analysis to understand the needs, preferences, and expectations of different consumer groups, and to identify any gaps or biases in their current marketing strategies.
Involve diverse perspectives and stakeholders in the creative process, from ideation to execution, and seek feedback and input from both internal and external sources.
Align their marketing messages and actions with their core values and purpose, and demonstrate their commitment to DEI through concrete and measurable actions, such as supporting social causes, partnering with diverse organizations, and promoting diversity within their own workforce and culture.

Mental health epidemic

According to the World Health Organization (WHO), depression, anxiety and behavioral disorders are among the leading causes of illness and disability among adolescents. Globally, one in seven 10-19-year-olds experiences a mental disorder, and suicide is the fourth leading cause of death among 15-29 year-olds.

These statistics highlight the urgent need for addressing mental health challenges in young populations. It started with the COVID-19 pandemic, which exacerbated feelings of alienation and hopelessness globally, but indisputably, mental health challenges are on the rise, especially among adolescents and young adults. New factors, including geopolitical tension, the threat of war, and climate change, contribute to these feelings. TikTok trends like Corecore reflect general malaise and disenfranchisement among youths, as is the falling birth rate across almost all developed economies.

Companies can take a proactive leading role to fight the hidden pandemic of mental health:

Encourage flexible work hours and remote working options where possible to help young employees manage stress and maintain a healthy balance between their professional and personal lives.
Offer access to mental health services such as counseling or therapy sessions, and ensure employees are aware of these benefits. Create an environment where seeking help is normalized and supported.
Conduct regular mental health training for managers and staff to recognize signs of mental distress and to foster a supportive work environment that can respond appropriately to these challenges.
Create safe spaces for young employees to discuss their mental health challenges without fear of judgment or reprisal. This can be facilitated through regular check-ins or peer support groups.
Provide mentorship programs, career counseling, and professional development opportunities to empower young employees and give them a sense of progression and future prospects.
Engage employees in community service and volunteering opportunities which can provide a sense of purpose and improve mental well-being.
Foster an inclusive culture that celebrates diversity and provides a sense of belonging, which is crucial for mental resilience among all employees, including youths.
Create marketing campaigns and social media content that resonates with the younger generation by addressing their concerns and promoting positive messages related to mental health and resilience.
Train leaders and managers to lead with empathy and understanding, which is essential for creating a supportive environment conducive to mental resilience.
Show commitment to environmental sustainability, as concerns about climate change can significantly impact the mental health of young people who are particularly invested in the future of the planet.

Opportunity and Risk

The year 2024 will be a year of change, challenge, and opportunity for businesses and workers alike. The global economy will face some headwinds, but also some tailwinds, depending on the region and sector. AI players will continue to innovate and disrupt, creating new value and new risks. The future of work will require new skills, new mindsets, and new tools. To succeed in 2024, businesses and workers will need to embrace AI, not fear it, and use it as a copilot, not a competitor.