Along with the introduction of countless new challenges, existing business trends accelerated, perennial issues intensified, and cracks widened into chasms.
During this unprecedented year, the long-running concerns of executives have deepened: Recruiting top talent, adapting to change, keeping up with technology, and responding to consumer and investor demands related to social and environmental issues have all taken on greater complexity, while new, previously unimagined challenges have emerged. So have a number of patterns which could forever alter the global business landscape.
Thrust into unknown territory and forced to rapidly adapt, organizations discovered that remote work can work. A full return to working on site, exactly as before, may not be feasible or even desirable. A stress test of epic proportions brought the strengths and weaknesses of global supply chains to light, creating opportunities for improvement. Crisis management skills became day-to-day tools, which has sharpened them. Chief human resource officers took on new importance amidst seismic shifts in the way employees work. The necessity of skilled talent management became abundantly clear.
As these developments unfolded, several rifts in the corporate world widened. First, the biggest, most powerful firms solidified their supremacy. This is especially true of those in the enviable position of providing the products and services that mass quarantines and remote work demand. Ecommerce giants like Amazon, cloud-based software providers like Microsoft, videoconferencing companies like Zoom and streaming services like Netflix were poised to deliver the conveniences that virtually overnight became essentials. In this trial by fire, the mightiest have prospered, and the weakest have collapsed.
With stocks reaching new highs as small businesses closed their doors, the gap between Wall Street and Main Street expanded. Investors were eager, and as The Economist explains, “flush with cash and starved for returns in a world of near-zero interest rates”, they injected a record $3.6 trillion of new capital into non-financial firms that seemed most likely to outlast the pandemic. Even the seemingly vulnerable had cash inflows, as investors bet on their ability to reassert their strong market positions after the pandemic. Carnival Cruise Lines raised $6.2 billion in debt and equity. Boeing sold bonds valued at $25 billion. There was a flood of IPOs.
Another existing rift, between the Western and Chinese technology sectors, grew to the point of emitting shockwaves across global markets. Former U.S. president Donald Trump was bent on thwarting Chinese technology firms. He succeeded with Huawei, though not with TikTok. President Joe Biden may dial down Trump’s anti-China stance, but suspicion of the regime will probably remain, generating friction.
Geopolitical forces continue to impact technology supply chains, calling crisis management plans into action and highlighting a need for agility as well as transparency. Commercial antagonism between the West and China is putting companies that serve both markets uncomfortably in the middle – notably Taiwanese semiconductor firms, global energy supermajors, and ASML, a Dutch firm that supplies equipment to the semiconductor industry and surpassed Siemens this year as Europe’s biggest industrial concern. They all might have to choose sides.
