Five Trends to Watch in 2024

The year 1989 was a momentous year. I started college with all the amazing experiences that entails, yet the one event that stands out in my memory is the fall of the Berlin Wall on Nov. 9.

The Cold War tensions that dominated my entire life up to that point—especially as a military brat—seemed suddenly to be a thing of the past. The future held hope of a more peaceful and prosperous era. By the time Pink Floyd held their The Wall concert in Berlin the following July, it had already become clear that the world had become a less certain place. In addition to the turmoil in former Eastern Bloc countries and the disaggregation of several Soviet republics, the Gulf War launched in August of 1990—an early sign of a world shifting away from bipolar stability to multi-polar uncertainty.

We are in another era not unlike the early post-Cold War years. We are now seeing the same trends being adapted to the current global environment, and I predict that just like the 1990s started with a whimper that turned into an economic boom, we will see this current economic malaise turn into a boom over the next few years.

1.Re-alignment of trade blocs

Predictions of a re-alignment of trade blocs and regionalization of trade have been made for several years now, and in the next year we should see a couple of key developments. The United States has invested tremendously in rebuilding its domestic manufacturing and supply chain capabilities via the Inflation Reduction Act. Not everything can be made domestically, but partners make for a stronger position at the bargaining table against key rivals like China. As stakeholders jockey to get ahead of the presidential elections, we may see several key agreements in 2024. The former NAFTA trading sphere seems a likely foundation for adding certain key like-minded trading partners, especially key countries in Latin America and the Caribbean. The United Kingdom’s economic realities since Brexit are pushing it into a position where it may have no choice but to sign a trade agreement that benefits its former colonies more than itself, and we may see key partners in the Pacific—Japan, Australia, Vietnam, the Philippines, maybe South Korea—deepen trade ties with the U.S. India also seems likely to pursue more linkages with the U.S., albeit in a way that doesn’t impede its ability to play both sides of the trade wars.

2. More vertical integration

The world is already seeing a re-globalization of supply chains with risk management driving reshoring, and political uncertainties are realigning company supply chains. These considerations will also drive more vertical integration in an echo of 1990s merger and acquisition activities. This will happen for four reasons. Firstly, it will result from increasing scarcity of resources and inflationary pressures; companies will want to ensure sources of supply and control over critical inputs. Secondly, COVID taught supply chain managers the dangers of outsourcing. The greatest danger is complexity because complexity increases the chances of an unpleasant surprise. Outsourcing will still be important, but companies will approach it with more caution. Thirdly, newer technologies increase flexibility and adaptability, meaning that suppliers become more interchangeable. This shifts competitive advantage away from finding key suppliers and more toward developing key competencies and skills, and those investments increase the incentive to control and own more of the supply chain. Fourthly, as technologies closer to consumer markets intensify, we will see vertical integration as a means to control information and pool demand variability to reap more profits; we have already started seeing this in several large consumer companies like Google, Microsoft, and Apple.

3. Political activism

Look at what happened with three Ivy League university presidents who testified (badly) to members of Congress. America has a history of crazy politics in the pre-World War II era, and those days are coming back. George Bernard Shaw once quipped, “Democracy is a device that ensures we shall be governed no better than we deserve.” The “free market” era of economic policy accompanied an era of unprecedented prosperity in human history. Although they seldom state it publicly, the era also made it abundantly clear to certain corporations and their leaders that they needed government policies and investments to ensure their success in a hyper-competitive market. Corporate lobbying experienced a wave of professionalization in the 1990s that drove the rise of several Wall Street darlings, including Amazon, PayPal, Apple, Tesla, Microsoft, and the major banks and biopharmaceutical companies. Their success is unparalleled in human history, and it is now accepted corporate practice to achieve and maintain success by lobbying and influencing regulations and enforcement. Our shift away from free market policies to an era of economic policy as international diplomacy means that politicians and governmental leaders will be ever more receptive to corporate overtures to influence government spending and economic oversight.

4. Labor scarcity

The demographic clock has already started on the decreasing numbers of workers entering the labor pool. Census Bureau data project that the population of workers entering or in mid-career in the workforce (ages 18-44) is projected to decline slightly in every census through the year 2100. The reasons range from a decreased fertility rate that means fewer younger workers to replace the older generation to “childcare deserts” that are reducing workforce participation rates to reduced immigration in-flows. The upshot: labor is becoming a bottleneck to achieve competitive advantage. We’ve just started to see the increased flexing of union muscle across a variety of industries. Smart companies will start building a culture to attract and retain workers now—a reputation for being a good place to work takes time to build. Education, the right benefits, the right working environment, and competitive compensation should all be part of a talent management strategy. Just like in the 1990s, the need for labor will outpace worker availability leading to all-time low unemployment. Inflationary pressures will unevenly affect wages across industries, yet on the whole we’re entering an era that will be good for labor.

5. Technology redefining worker ethics

AI, automation, and other technologies promise to change the productivity equation. Combined with changes to labor availability and corporations find themselves redefining their relationship with workers. A lot of managers no longer know how to treat workers, and having technology—whether AI, WFH, or other systems—acting as an intermediary has led to some dehumanizing of some management-labor relationships. Work from home is still a battleground between management and workers, with perhaps the most telling characteristic being the lack of recognition in most policies about which kinds of work are more effectively done in a WFH setting. Corporations are slowly getting back to investing in education and training as effective multipliers of labor productivity. In addition to the drive to increase productivity, many new technologies will require reskilling of the labor force on a continuing basis. Once the pay issue is settled, few policies improve retention as well as training and education—and these programs will also evolve ethical standards for both workers and management.

2024 will prove challenging for companies that don’t take an assertive stand. History shows us that fortune favors the bold, and in an uncertain environment, you are more often successful by rallying your forces than by waiting to react. Boldness might be the best approach in the year to come.

About the author:

Michael J. Gravier, Ph.D., C.T.L., is chair of the Department of Marketing and professor of Marketing and Global Supply Chain Management at Bryant University in Smithfield, R.I.