The Era of Concerted Chaos
“Chaos isn’t a pit,” explains Petyr ‘Littlefinger’ Baelish in Game of Thrones, the HBO series. “Chaos is a ladder.”
“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of…”
This excerpt from Dickens’ Tale of Two Cities perhaps aptly sums up the world today in an era of concerted chaos. The headlines scream of crashing dreams in crypto, disruption and discovery in the same breath, as Generative Artificial Intelligence unlocks our imagination opening up new opportunities, while transforming even creative skills making some of those redundant. The biggest challenge we face today is that the future has no template of the past to build upon.
A fractured world
Nevertheless, what is certain is that we will face an increasingly fractured world, geopolitics will drive corporate decisions on who to do business with or not, organisations are already caught up in the crossfire of countries in a technology arms race. Meanwhile, the future of work has arrived early. Gen-Z that has entered the workforce demanding ethical behaviour from organisations. The devastating economic impact of climate change is all too real. Even the World Economic Forum summit at Davos was without snow. Energy security is high on the agenda of countries as the world keeps struggling to shift from hydrocarbons to renewables, oscillating between hope and despair.
Adaptive & Agile to Survive & Thrive
To survive and thrive in this chaotic and volatile world, organisations will have to be adaptive and agile to build resilience to withstand the coming recession and future-proof themselves. To achieve this agility for a flexible future leaders must clearly and consistently communicate strategy, and strive for distributed leaders at every level explicitly linking their team’s objectives to the overall strategy.
The chaos of a recession, however, is both a pit and a ladder. In the face of uncertainty, some companies retrench. They abandon attractive customers and promising markets, offload valuable assets at fire sales, cut prices, and seek new partners to bolster cash flow. Others start climbing. They seize opportunities and improve their fortunes.
Every crisis, even climate change, brings in its wake, opportunities. To reach net-zero emissions, the world must invest $3.5 trillion more each year than it currently invests. Great companies and leaders won’t let today’s challenges deter them from making the big decisions and investments needed to accelerate the transition.
Shifting centre of gravity of global trade
Even as we feared a reversal of globalisation as supply chains were disrupted, the value of global trade reached a record level of $28.5 trillion in 2021, according to UNCTAD. That’s an increase of 25% in 2020 and 13% higher compared to 2019, before the COVID-19 pandemic struck. Global trade in goods by volume has returned to growth amid continued disruption to supply chains caused by the pandemic and the war in Ukraine, and was 10% higher than pre-pandemic levels in May 2022.
“The centre of gravity of world trade is poised for a turn to the south,” says a DHL Trade Growth Atlas report, which finds Southeast and South Asia, as well as Sub-Saharan Africa will all be central to trade growth in future. By contrast, the rate of China’s trade growth will slow, and its share of global growth will fall, as trade growth spreads across more countries. By 2026, emerging economies will account for 45% of trade growth, with 55% in advanced economies, according to the DHL report.
India’s technology ascent
As companies pursue the China+1 policy, India stands to gain. The latest report from CB Insights highlights India’s technology ascent. India has stepped into the venture capital (VC) spotlight. VCs are betting on the country in the hope of capitalising on the start-up ecosystem’s next big period of growth. The country, which is projected to become the world’s third-largest economy by 2030, presents a technology opportunity that domestic and international VCs are betting big on. JP Morgan analysts expect India will manufacture 1 in 4 iPhones by 2025.
In 2022, a number of firms raised massive funds devoted to the region, including: Sequoia Capital, which launched a $2-billion India fund; Accel and Lightspeed, which each raised $500 million + funds for India and Southeast Asia; and India’s own Fireside Ventures, which closed a $225-million fund. Tiger Global Management is reportedly raising a $6-billion venture fund that will feature India as a core focus area. But the picture is not without its major setbacks as a number of Unicorns have failed to deliver and have been huge disappointments. In Q3’22, an index of India’s stocks outperformed a Chinese index by 33 percentage points, the largest margin in over 2 decades, according to Bloomberg. As risk grows in China, Citigroup indicated in September 2022 that India is one of the top markets it will target for expansion. Nevertheless, it cannot hide the challenge of widening economic inequalities. India’s richest now own more than 40% of the country’s total wealth, as per an Oxfam report. The bottom half of the population owns just 3% of wealth.
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