The Financial Express

Shaping the future of markets

Helal Uddin Ahmed | Published: April 17, 2019 21:10:37

Shaping the future of markets

Boosted by continuous integration of global economies, unprecedented transformations have occurred in recent years in jobs, businesses and markets due to technological innovations. Other catalytic factors in this transformation have been demographic shifts, the impact of climate change and the need for greater sustainability. Therefore, businesses, institutions, governments as well as entire societies and nations are now engrossed with the issue of seizing future opportunities in the light of current scenarios.

In this backdrop, the International Labour Organisation (ILO) and the International Organisation of Employers (IOE) have recently published a joint report titled 'Changing Business and Opportunities for Employer and Business Organisations'. The joint study has explored five major trends affecting businesses and their implications for business strategies and models, operations and personnel management. Based on feedbacks from 500 companies around the world, the aim of the study was to help the Employer and Business Membership Organisations (EBMOs) as well as policymakers and other stakeholders to comprehend the challenges faced by businesses in the light of recent global trends.     

The five trends that are shaping the way businesses operate now across the globe are: technological innovation, global economic integration, demographic and generational shifts, climate change-cum-sustainability, and dearth of skilled labour. Technological innovation is having a transformational effect on how and where businesses operate, their human resource needs and skills requirements. In the ILO-IOE survey, 56 per cent respondents termed technological innovation as a global trend wielding the greatest influence on businesses. It facilitates access to new markets, fosters opportunities for new business models, accelerates development of new goods and services and enables new modes of work including through virtual team-building and remote work-outputs. Among those surveyed, 76 per cent recognised that access to new markets is being facilitated by technological innovation, while 72 per cent North American respondents noted its considerable impact on creating opportunities for new business models.

Businesses also hold the view that the world economy has become truly global despite some recent setbacks. Once in the periphery of global value-chains and mainly functioning as suppliers of low-cost products, unprocessed natural resources or ordinary services, the emerging economies are now becoming the magnets for attracting capital, innovation and talent. Global economic integration is also resulting in harmonisation of corporate global governance as well as balancing of regulatory-cum-business environments. Around 40 per cent respondents opined that rising harmonisation is wielding a significant impact on businesses. About 37 per cent respondents also mentioned the trends of exposure to global economy as well as political uncertainties as key factors influencing business decisions.   

Businesses also appear to be concerned about managing a multi-generational workforce. The changing demographic dynamics and declining working-age population in some regions of the world such as countries belonging to the Organisation for Economic Cooperation and Development (OECD) and East Asia are reshaping the traditional fundamentals of work, retirement and savings. The focus is on taking advantage of the youth dividend and potential economic gains in other regions of the world like Sub-Saharan Africa, Latin America and South Asia.

Businesses are also increasingly coming under pressure to become sustainable not only in financial terms, but also in terms of social and environmental impacts. The vulnerability of businesses is now impacted by rising environmental risks alongside innovations in the areas of sustainable materials and energies. The workers, consumers and governments are putting additional pressure for more sustainable working environment, corporate values and responsible conduct. All these provide opportunities for those businesses that can adapt quickly.

Besides, businesses are facing the challenge of locating, hiring and retaining skilled workers. Suitably skilled employees are often not found at job-sites due to shifts in knowledge, education and training. Dearth of relevant skills often creates problems even in case of entry-level jobs. In the ILO-IOE survey, 40 per cent employers mentioned lack of skills as the main reason for entry-level vacancies, while 60 per cent felt new graduates were not sufficiently prepared for current workloads. A majority felt needed skills among employees could be delivered by attuning curriculum with the requirements of the economy. Besides, EBMOs could play a proactive role in moulding the education system in order to groom and boost required skills. 

The businesses and EBMOs need to anticipate and adapt in the face of continuous impact of these trends. They need to respond more swiftly to changing business requirements in the backdrop of global economic integration, a more mobile workforce and rapid technological advances. They can also help accommodate diverse opinions among developed economies and emerging markets on pressing issues like trade, migration and technological governance.

The five global trends provide an opportunity to revitalise the collective power of businesses and shape their structural and functional future. The EBMOs can engage with policymakers to mould the future of regulatory settings in economies and societies, devise creative solutions to urgent challenges affecting the workplace and ensure the benefits from productive potentials of innovations for all. They can also guide their members in addressing emerging regulations on innovation, sustainability, demographic shifts and global economic governance. They can help coordinate the efforts of businesses for improving the skills-base of workers through revised educational cum training programs.

Around 69 per cent of businesses in the ILO-IOE Survey acknowledged the considerable impact of rising environmental and disaster risks on their operations and reputation. Around 51 per cent noted the increasing demand of policymakers for compliance with environmental targets, while around 40 per cent in high and upper-middle-income countries mentioned the workers' demand for more sustainable working environments and corporate values. Redesigning work to allow elderly workers to contribute on a continual basis as well as well as adjusting retirements in the light of existing reality should also be considered by the EBMOs.  

Proactive engagement with different stakeholders is needed on the part of EBMOs for shaping the future of markets. They need to adopt a long-term vision grounded on strategic foresight and strengthened representativeness to reflect the prevailing business landscape. They should provide leadership in anticipating the future of businesses, and innovate while offering solutions and knowledge to members. They should proactively provide the right mix of policies and services today for building the work environment of tomorrow.

Dr. Helal Uddin Ahmed is a retired Additional Secretary and former Editor of Bangladesh Quarterly. hahmed1960@gmail.com

Share if you like