5 Key Global Business Trends to Watch in 2021 According to NYU Stern
As we bid goodbye to a tumultuous year and usher in a fresh start, it’s essential to keep a close watch on the global business trends that will shape the coming year. The NYU Stern School of Business has identified five key areas to watch out for:
1. Accelerated Digitalization
The COVID-19 pandemic has pushed companies to embrace digital technologies across their operations. This trend is likely to continue in 2021, with companies investing in cloud, artificial intelligence, the Internet of Things and automation technologies. The increased use of these technologies will drive efficiency, enhance customer experience, and enable remote work.
Take the example of Walmart, which launched Walmart+, a subscription-based service that leverages its digital capabilities to offer free unlimited delivery and other perks. In 2021, we can expect to see similar launches by large corporations and startups alike, resulting in stronger competition and increased innovation.
2. Greater Focus on Sustainability
Consumers and investors are becoming increasingly environmentally conscious and are prioritizing businesses that prioritize sustainability. This trend is set to continue in 2021, with more businesses transitioning to renewable energy sources, reducing their carbon footprint, and investing in green infrastructure.
The Swedish furniture giant IKEA has been leading the way in sustainability. It embodies its “People and Planet Positive” ambition, which includes using 100% renewable energy by 2020, and reducing its absolute greenhouse gas emissions by at least 50% by 2030.
3. Reshaping of Global Supply Chains
The pandemic exposed the vulnerabilities in traditional global supply chains, leading to a reassessment of supply chain strategies. In 2021, businesses are likely to focus on shortening supply chains and increasing their resilience.
Take the example of PPE production. In the early stages of the pandemic, countries experienced a shortage of PPE due to their reliance on China. In response, many businesses have since invested in domestic production, reducing their dependence on global suppliers. We can expect to see similar trends across other industries in 2021.
4. Social Responsibility as a Competitive Advantage
Corporations are increasingly expected to play a role in addressing social and political issues. Companies with strong environmental, social, and governance (ESG) performance are likely to be viewed more favorably by consumers and investors in 2021.
One example is Ben & Jerry’s, which has a longstanding commitment to social justice and climate action. Its “Climate Justice and Racial Justice” campaign is a prime example of a corporation using its platform to address social issues.
5. The Continuing Growth of China
China continues to be a dominant force in global business, a trend that has only intensified in the wake of the pandemic. In 2021, China’s economy is set to expand by 7.5%, continuing the strong growth trajectory of the past few years.
Multinational corporations are shifting their focus to China, with some companies opting to set up their supply chains within China itself. The continued growth of China’s economy means that it will continue to be a critical player on the global business stage.
Conclusion
The year 2021 promises to be a critical year of transition for global businesses. In this dynamic landscape, corporations need to be agile, resilient and adapt quickly to the changing business environment. Keeping informed about the latest trends and insights, as identified by NYU Stern, will be essential as we approach the New Year.
