Economic woes call for new world of authentic diversified leadership
Economies have a build-up of private and public debt leading up to significant debt crises globally.
We live in times of unprecedented uncertainty. The global economy is facing a myriad of economic and related risks. Some risks are old, some new. For example, we have the return of inflation, negative supply shocks, and the risk of stagflation.
Economies have a build-up of private and public debt leading up to significant debt crises globally. We also live in a world in which there are other types of threats connected to the economic, monetary, and financial risks including geopolitical, and environmental threats coming from global climate change, health threats given the occurrence of severe global pandemics, threats from technology, artificial intelligence, robotic automation.
Technological innovation and automation may increase the economic pie, but they also lead to potentially long-term permanent unemployment and an upsurge in inequality. However, the workplace is changing rapidly as is the mode of work with financing and technology being at the epicentre of the way forward.
In Kenya, many citizens are celebrating the launch of the Hustler Fund initiated by President William Ruto. The fund is a digital financial inclusion initiative designed to improve financial access to responsible finance for personal, micro, small, and medium-sized enterprises (MSMEs) in Kenya.
The government has issued this fund a startup capital of Sh50 billion which the citizens can tap into for loans between Sh100,000 and Sh3 million at eight per cent interest per annum.
Low-income earners
This fund aims to provide an impetus and stimulus to low-income earners without collateral in the bottom-up economic model. If we look at the global scenario, the combination of continuing inflation and recession is making venture capitalists and private equity firms less eager to invest in startups that pose a high financial risk. Investors will instead prefer to invest in established companies that have grown beyond their unprofitable years and proven themselves to be a good financial risk.
For organisations to ensure they are competitive when seeking outside investors, they need to be able to provide financial reports to prove their financial health and worthiness as an investment. With many investment options seeming high risk due to a myriad of reasons, angel investors too are taking precautions.
Established business persons and entrepreneurs alike are keen to know what to expect during the year 2023 in terms of trends.
Inflation will continue to be high in 2023. Many economies will stagnate or even shrink and businesses need to prepare for that reality. Supply chain security is another vital issue. It started with a covert backlog and has become worse by Russia’s invasion of Ukraine, compounded by labour shortages across the world.
This has pushed prices up and created shortages of many goods, including a range of goods from grains to computer chips and many services. Energy companies need to improve their resilience in any way they can.
This means reducing exposure to volatile market pricing of commodities as well as building protective measures into supply chains to deal with shortages and rising logistical costs. This year will be when sustainability will be right at the centre of every organisation.
Companies need to ensure that sustainability moves into every aspect of their business. We now live in a world of conscious consumers. Conscious investors will assess an organisation on their environmental and social impact.
Global economy
That means organisations need to reimagine their processes and their entire supply chain to make sure they minimise any negative effects on their business. While globalisation is a hot topic, countries are witnessing a return to protectionism, fragmentation, and the Balkanisation of the global economy and supply chains.
During 2023, we are going to witness an acceleration of digital transformation. We have seen this now for several years and this trend continues.
Digitisation and technologies like artificial intelligence will continue to augment business processes and the work-space.
Additionally, we are seeing 5G, blockchain, cloud computing and the Internet augmented in virtual reality. All of these technologies are enhancing one another through the use of artificial intelligence, which will create a world of rapid technological development. That means companies need to review their products and services. They also need to redesign the processes of business with all of these cutting-edge technologies in mind.
Kenya is considered the regional Information and communication technology hub of East Africa, being a leader in broadband connectivity, information technology infrastructure, and value-added services including mobile money and fintech. What organisations must focus on is the efficient provision of customer service and the strengthening of security measures where technology is involved to avoid data theft, mobile money fraud and such.
Microsoft CEO Satya Nadella famously said: “The metaverse is here, and it’s not only transforming how we see the world but how we participate in it – from the factory floor to the meeting room.”
Internet
We are also seeing the emergence of the metaverse, and the third evolution of the Internet with the uses of technology like augmented and virtual reality.
Companies should ensure that their people have the talents needed for a world where we increasingly collaborate and work alongside intelligent machines.
They already have massive skills jobs in areas such as digital literacy, artificial intelligence, data science, metaverse skills, and so on.
Plus the coronavirus pandemic has made many people reevaluate their jobs leading to mass resignations in many industries as was witnessed during the phenomenon termed “The Great Resignation”, which has changed work dynamics.
The fast-changing times provide a considerable challenge to reskill the workforce to get ready for the fourth industrial revolution. Additionally, employers need to ensure that they offer a working environment that is fit for this new world of work.
Naturally, all these initiatives come with huge cost elements. Businesses should make sure that they attract the right talent whilst offering flexibility, hybrid work, authentic leadership, and a focus on values and diversity. It will be vital for organisations to examine business needs, perform functional requirement analysis and think clearly and strategically about tech spending.
Barot is a business and financial analyst. Email:
