2020 was the year nobody expected, and business practice as we knew it took a beating – with operational and market challenges that pushed many industries off a cliff. But now we face a new year, the question lies in whether we respond by putting our heads in the sand, or whether we adapt to this novel environment? Kommunal welcomed Professor Andrew Macleod for our first talk of 2021 for an insight into just what the upcoming year holds, and business strategies to bear in mind in a post-COVID world.
Here, we dive into some of his points, and take a closer look at the new landscape ahead of us.
Never before have we had to question things as much as now, and Macloed’s talk gave us reason to reconsider the importance of open dialogue between the financial, corporate and public sectors.
Corporate social responsibility has evolved over the years, and what once would suffice as proving a company’s ethics is now considered merely paying lip service to the issue. Now, we need to consider the whole business model rather than just having a separate social responsibility program. This more holistic view of a business can be more of a force for good, and fine-tuning the business arms such as sales, human resources etc, will often lead to a better outcome for the business and, by proxy, the community it serves.
The private sector can be a force for good, if we have the right business model.
Ethics and finance are more linked now than ever before, with ethical loss equated to financial loss as we see a growing demographic of socially-aware and digitally connected consumers. According to Macleod, Australia is, in a sense, the most socialist country in the world “through the collective ownership of the means of production through superannuation, but still a capitalist system through the means of exchange”. It is a new model that he says people haven’t yet understood, and this shift is causing a revolution in the financial markets. A growing corpus of patient capital is bringing with it a change in time frames. Customers are increasingly looking for longevity in companies – people want to see where their investment will come in years down the line.
The revolution has also given rise to an increased demand for transparent communication from businesses. Often, young people don’t even realise the impact they have on the market, and the opportunity to have a closer interaction with these young customers is a must if businesses are to keep up with the changing model. So the questions you should be asking yourself are; how do you engage with this new generation of customers? And how do you ensure ethical practice is integrated into every strand of your business model?
Ultimately, good corporate behaviour results in better community outcomes, better profitability, and better sales, and communicating this incentive has never been more important.
Another major topic Macleod covered is that of the rising influence of the Asian market – specifically that of China, returning to the same economic status it last had in the 19th century. The country is rapidly closing in as the forerunning global economic power, and the takeover will mean the return to a demographically-driven economy – that is, one where there is a direct link between population size and economic size. It will also mean a shift away from a Western individualistic to a collectivist mindset around trade. The question remains, are we ready to adapt to this change? And what does that mean for you, your family and your business?
Ensuring Australia maintains a healthy trade relationship with China is, Macleod says, crucial. The dominance of Asian markets is inevitable, all Australia can do is decide what role it wants to play in this new, Asiacentric world. Macleod identifies the opportunity for Australia as a linguistic and cultural translator – straddling the European and Asian markets. We should, he says, be positioning ourselves as a ‘trusted partner’ in the integration of Asian and European markets.
“Are we seeing opportunities?” He asks – “or are we missing out because of our cultural narratives?”
While global hubs of influence are shifting, we are still at the beginning of this change, and there’s still time for Australia to step forward into its new role in the new world.
With an open mind to these changes in our customer base and market landscape, businesses can begin to equip themselves for the year ahead, and hopefully start 2021 on the right foot.