Tracking 2024 trends at midyear: Politics, labor, inflation, AI, ESG

From the opening hours of 2024, it was clear that the year wouldn’t be ordinary. As business leaders mark the year’s midpoint, they’re working to pursue growth while managing risks and opportunities in a world that craves stability amid change.

1. 2024 will be a huge year for geopolitical change and risk – tracking. 2024 has so far comprised what the Economist called “The Biggest Election Year in History,” with national elections scheduled in at least 64 countries plus the EU, representing close to half the global population. Many of the elections already held will prove consequential for years to come, including Taiwan, Pakistan, Finland, Indonesia, Belarus, Portugal, Russia, Senegal, Kuwait, Slovakia, South Korea, India, El Salvador, Panama, Chad, South Africa, Iceland, Mexico, the EU, Belgium, the U.K., Iran and France.
   
   Upcoming elections include Syria, Venezuela, Jordan, Austria, Lithuania, Georgia, Croatia and the U.S.
   
   In parallel, wars and territory conflicts remain unresolved, including Russia-Ukraine and Israel-Hamas. China-Taiwan challenges remain a concern. Geopolitical alignment is increasingly less stable, moving away from traditional superpower bipolarity and hegemony, giving new countries greater influence.
   
   Geopolitical risks to business remain significant and multifaceted, particularly in terms of rules and regulations, trade conditions for goods and services, financial investment flows, market shifts, property peril, commodity prices, inflation, supply chain and employee security. Effective leaders continue to actively monitor developments at the country and local levels, mitigate risks where possible and prepare teams to act quickly and decisively when events occur.
2. Labor markets and work arrangements continue to catch up – tracking. Labor markets are more stable than they were at this time last year, with quit rates, labor participation rates, unemployment and job openings tracking to or improving beyond where they likely would've been without a pandemic in many countries.
   
   Nevertheless, permanent demographic shifts and a recognized baby bust have created long-term talent shortages for certain jobs and skills that could persist for years, and companies are still working to find needed employees. Further, the return to offices is back in the news globally with real estate and job data showing material differences in work practices across regions, countries and even cities. Leaders have progressed with balancing the often-conflicting needs of remote/hybrid work arrangements and in-person interaction; however, they recognize they are not done.
   
   More companies are onshoring and near-shoring to address geopolitical, supply chain and talent availability issues. Effective leaders have stepped up new talent strategies as boards and senior management teams become focused on culture and employee experiences that meet the complex needs of employees, along with transformed pay, benefits and career programs that enable them more broadly.
3. Inflation and recession risks subside but are not gone – tracking, depending on country. Inflation is lower today than in January in most countries, and most countries have dodged recession (some narrowly).
   
   In the U.K., the May year-over-year Consumer Price Index was down to 2.0% and for the Eurozone it was 2.6%, while in the U.S. it remained at a more stubborn 3.3% and in Australia it was 4.0%. Effective leaders continue to monitor conditions closely, developing new approaches to growth in the context of higher costs.
4. Leaders absorb new technology as governance matures and becomes more realistic – tracking, generally. Organizations have continued to increase their understanding and governance of generative AI and other key technologies, but many are still catching up. Recent lawsuits, regulations and security breaches suggest it’s early days for governance of technology and its usage at both governmental and corporate levels.
   
   Boards and senior leadership teams have increased their focus on technology in 2024 to address generative AI, including a focus on the metaverse, spatial computing and quantum computing. Effective leaders understand these technologies require new skills and deeper knowledge of their uses and have shifted from relying on traditional risk management and governance protocols to more dynamic governance models, leveraging the potential of new technologies while protecting the organization.
5. Leaders focus on the risk and performance impact of environmental, social and governance (ESG) factors rather than the ideology – tracking, generally. Considerable polarization continues to exist among corporate stakeholders on topics related to ESG, such as climate, diversity, equity and inclusion, wellbeing and governance. Emerging risks vary considerably for directors and officers across regions and organizations, with specific components of ESG ranking differently for different organizations.
   
   For example, health and safety are cited as top risks for most geographies, while other risks vary across regions. In practicing stewardship, effective leaders have reduced ideological rhetoric, focusing on practical application and the actual impact of actions on business performance and risk. They’re clear about why they act, in terms of compliance, corporate social responsibility or business strategy and how any actions should manifest themselves.

Effective leaders continue to focus on strategies that allow them to operate and grow in what’s proven to be an ever-disruptive environment, addressing short-term challenges while also seeking longer-term stability.

A version of this article originally appeared on Forbes on July 9, 2024.

Author

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John M. Bremen

Managing Director and Chief Innovation & Acceleration Officer

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