The coronavirus pandemic redefined the way we live, work and do cross-border trade. It marked the beginning of a new decade – a global refraction point where trends and transformations that were developing before the crisis were suddenly catapulted forward.
In this article we explore the business implications of three accelerating transformations that you need to understand, adapt to and leverage to improve your odds of winning in the new business landscape.
1. A reinvention of innovation
The way firms and industries approach innovation must be reinvented to remain competitive in a decade defined by global challenges. Pre-pandemic research shows that 84 per cent of managers recognise that their business success is extremely dependent on innovation, yet only 6 per cent are satisfied with their innovation performance.
Acquiring new digital capabilities and taking further steps toward service-oriented business models are key drivers of change in the quest for long-term profitability. Traditional organisational structures within R&D have become obsolete. Cross-discipline experimentation and collaborative innovation within business ecosystems and across sectors is key to success.
In addition, companies are likely to reconstruct and de-centralise R&D departments to move closer to their end customers, meaning that they will enhance regional and local innovation.
Swedish companies need to reinvent the way they innovate in order to stay at the top of the innovation league. Identifying new partners for co-innovation across sectors and regions will crucial, and so will building organisational structures that spur innovation. Setting up a global network of localised R&D organisations and turning local market insights into innovations and business opportunities will be vital for success.
2. The decade of sustainable action
The pandemic served as a sharp wake-up-call when it comes to tackling environmental, social and governance (ESG) challenges, and many countries are now aiming for a green recovery. The UN has called for a “Decade of Action” against the background of a stark reality. At the current rate of emissions, the CO2 budget for staying within the 1.5°C global warming threshold will be used up by 2026.
As such, going green has become a no brainer. Environmental regulations are becoming stricter than ever and consumers are turning their attention to sustainable solutions. Sustainability in all its forms is fast becoming a powerful competitive advantage.
Sweden ranks as one of the most sustainable countries in the world with a strong edge within circular economy and sustainable solutions across a broad set of industries. This reputation and expertise have been gained through trust and successful partnerships.
Companies need to leverage Sweden’s unique selling points, competitive advantages and industry knowledge when doing business abroad. That means learning to build a triple bottom line – economic, social, environmental – and transition to more sustainable operations and processes to be profitable in the long term.
3. The digital decade
During the pandemic, some companies saw years of digital development happen in only a couple of months. Gaps in digital infrastructure were rapidly identified and addressed and countries started to invest heavily to pave the way for 5G, AI and machine learning. Take China for example, where USD 1.4 trillion has been allocated to building new digital infrastructure over the next five years.
The digitalisation of increasingly complex products and services across industries and markets is now picking up speed and emerging sectors such as EdTech, e-health, and cloud services are thriving. It has been estimated that the world’s data will grow 28 per cent CAGR until 2025. New business models and practices in cyber security, sales and marketing will evolve rapidly. As the data economy grows it will enable more customised service offerings, but it will also highlight issues related to consumer privacy and ethics.
Sweden ranks among the top five countries in the indices for digital maturity and connectivity. While many Swedish companies have a strong lead already in terms of digital performance, they can quickly be outrun by peers. Business leaders need to double down and expand their capabilities in data analysis and cyber security. Companies should also navigate customer integrity and ethics related to data accessibility and storage and continue to ready themselves for AI and other enabling technologies such augmented reality and virtual reality.
Want to know which trends have accelerated during the pandemic and how they will affect your business? Continue reading.