Building Resilience Amidst Major Changes in Market Forces & Stakeholder Expectations

A recent Nuveen study found that 51% of global institutional investors think that the current fundamentals of long-term market dynamics have lost their relevance. We agree. There are major changes happening across global market forces, consumer expectations, and grander societal contexts. It’s difficult to predict where all of these changes will lead, but we do know some of the general trends we need to be paying close attention to.

Economic policy changes: Governments and central banks around the world are making decisions to fight skyrocketed inflation that’s impacting economic growth and stability. We’re seeing economic conditions change in turn, with volatile consumer and business confidence, and billions being wiped off the market in mere days. This extends into the digital asset space as well.

Fluctuations in commodity prices: Natural resources are increasingly more expensive to extract or produce, giving countries that do, such as Russia, incredible global political and economic leverage. These shortages are currently severe within the EU. For example, France has less than a year’s worth of its own reserves of oil, gas, and coal. Italy has less than a year of gas and coal, and only one year of oil. Economies are under increasing threat from rising global energy prices.

Political instability and conflict: The Council on Foreign Relations estimates that there are currently at least 27 active conflicts around the world. And as global inequality levels rise and natural resource availability decreases, tensions rise. Economic historian Frederic Lane correctly stated that “what uses are made of scarce resources” largely determine how violence is organised.

Technological advancements and innovations: We’ve reached a state of exponential innovation at a previously un-imaginable pace. ChatGPT, DALL-E and other applications of artificial intelligence, along with blockchain, smart sensors, and pervasive data capturing are completely changing the ways we build businesses, provide services, learn, access financial markets, and more.

Changes in demographics and consumer behaviour: One of the greatest changes we are seeing are in new consumers - empowered through social media platforms, navigating often saturated markets, and with confusingly varied preferences by generation. And, some estimate that over US$68 trillion in wealth is going to be passed down from baby boomers – the wealthiest generation ever - to their Millennial and Gen-Z heirs in the next 30 years. These two generations are more vocal about how they want to spend their money and what they want to spend it on.

Environmental and social sustainability concerns: Speaking of which, a study by Nielsen found that 66% of global respondents aged 15 to 20 (Gen-Z) and 56% of global respondents aged 21 to 36 (Millennials) were willing to pay more for sustainable products. Governments are making ESG monitoring and reporting requirements stricter, and we’re seeing large scale collaboration toward addressing environmental and social issues. Nuveen even found that today’s institutional investors placed social inequality and climate risk as critical to new strategies where 86% agree that transition to low carbon economies present new opportunities and 52% believe that their investment choices affect social inequality. And as we seek to increasingly digitise economies and products and services, we may exacerbate problems of technological exclusion and increase our energy use to unsustainable amounts.

All of these factors have deep implications for the future of financial markets, industries, national and international policy agendas, and more. No matter where you are in the world, our markets are interconnected, so there are significant spillover effects on other markets around the world.

At Emerge, we help assess our clients’ resilience toward these changing forces through our Organisational Readiness Assessment, designed to:

  • Provide them with an analysis of the specific changing forces relevant to their organisation’s core offerings, as well as trends, insights, and forecasted innovation performance based on three key areas: global market forces, stakeholder expectations, and grander societal contexts;

  • Uncover blindspots across business, innovation and impact strategies while identifying missed and new opportunities for revenue-generating impact outcomes. Blindspots may include critical issues such as digital waste, data recycling potential, unintended consequences, ESG- compliance, and more; and,

  • Propose possible pathways for short, medium, and long-term strategies that boost revenue, re-leverage existing impact outcomes, and provide foundations for innovation strategies that are future- proofed against the forces of our evolving economic system.

Addressing the pressing issues our world is currently facing will require collective action and more thoughtfully designed strategies that can merge sustainable development objectives, technology, and viable financial models that fearlessly break the old systems and structures that got us to this point whilst re-imagining a new standard of financially viable impact innovation.

For more information on Emerge and our work, please subscribe or visit www.emergetechlab.com. To scope an Organisational Readiness Assessment, please click here.


Sources: Nuveen, The Global Sustainability Institute at Anglia Ruskin University, The Council on Foreign Relations, Frederic Lane, The Sovereign Individual by William Rees-Mogg and James Dale Davidson, The deVere Group, and Nielsen.

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