AFTER a rollercoaster ride of a campaign period and a tense few days following election day, our country is finally ready to swear in a new set of leaders. The way the 2022 national and local elections took over our lives, you can’t be faulted if for a minute you’d forgotten that we are still in the middle of a pandemic. The disruptions, coming one after the other, have almost become commonplace, teaching us to adjust to major shifts and twists in our day-to-day lives. There will be more to come.
Climate change alone has the potential to upend our way of life in so many devastating forms — the Philippines is one of the nations identified as being at highest risk of multiple climate hazards. Rapid developments in emerging technology are also changing lives, paving the way for advances across industries and maybe even new “realities.”
Looking at this dynamic landscape, Deloitte has identified five key discontinuities that leaders should stay on top of because of their potential to shape the way businesses will grow in the years ahead:
Radical science and technology. The overwhelming volume of data the world is producing, coupled with increasingly intelligent machines that are processing this data, can lead to unprecedented scientific discoveries in the coming decade. These revolutionary advances are shaping what Deloitte calls “emerging new worlds.” A couple of weeks ago in this column, my colleague wrote about the metaverse and how, within that virtual space, people can create increasingly accurate digital twins of our world. This “mirror world” is just one of these emerging dimensions that will pose great opportunities and challenges alike to businesses across industries.
Shift to stakeholder capitalism. The time when a corporation’s primary purpose was to create value for its shareholders is long gone. Societal shifts, a fragile environment and changing values have put pressure on business leaders to think more holistically about the impact their businesses have on the world and to include all stakeholders when considering their actions. This focus on shareholder capitalism will require business leaders to find new ways of accounting for unintended impacts on, say, the physical environment. More than ever, they have to develop an authentic ESG agenda that will stand the scrutiny of stakeholders. Individually, business leaders will also have to be more mindful of how they hold themselves accountable and how they practice transparency in action and communication as more and more people are watching.
Globalization reinvented. Geopolitical tensions and the new reality the pandemic has shaped have led to an uncertain globalization where minimal government interventions may no longer be the ideal. During the pandemic, for example, when multinational enterprises experienced severe disruptions as global supply chains ground to a halt, tax authorities worldwide leaned hard on the way those businesses reported their losses, making sure, for one, that the losses weren’t attributable to transfer pricing policies adopted by the corporations. Moving forward, business leaders can expect governments to play a more central role in domestic economies in an effort to recover from the pandemic, mitigate the impacts of climate change and adapt to accelerating technological and societal changes, among others.
The decline of the self-contained firm and the rise of the ecosystem. Another traditional viewpoint that is set to retire is the idea that individual firms can, on their own, create value for shareholders. Digitization, datafication and increasing specialization have gotten us to a place where collaboration is a must and collaboration across industries even better. At Deloitte, for example, we have key services that we would not be able to offer without alliance partners, especially in the area of cloud computing. In this environment, business leaders will have to become adept at spotting strategic partners within their ecosystem and maximizing those partnerships for competitive advantage.
Rise of networked power. Just as corporations are branching out into ecosystems, they are also breaking down the walls in their backyards. Many large organizations have begun decentralizing power and dissolving silos within their walls to improve flexibility, agility and adaptability. The internet has also shifted the balance of power and influence so that we are now seeing the steady rise of customer power. Business leaders will have to learn to navigate this changing power dynamic and resist the urge to hold on to power lest they miss out on critical opportunities for collaboration and innovation.
These discontinuities have the potential to reshape the business landscape in ways that are deep and enduring, even as we are still waiting to see what our “normal” will look like after the pandemic. As our nation stands on the edge of transition to a new power, we also anticipate great changes to the way we will forge ahead as an emerging market in a volatile, uncertain world.
The author is the tax and corporate services leader of Deloitte Philippines (Navarro Amper & Co.), a member of the Deloitte Asia Pacific Network. For comments or questions, email [email protected] Deloitte Asia Pacific Ltd. is a company limited by guarantee and a member firm of Deloitte Touche Tohmatsu Ltd. Members of Deloitte Asia Pacific Ltd. and their related entities, each of which are separate and independent legal entities, provide services from more than 100 cities across the region, including Auckland, Bangkok, Beijing, Hanoi, Ho Chi Minh City, Hong Kong, Jakarta, Kuala Lumpur, Manila, Melbourne, Osaka, Seoul, Shanghai, Singapore, Sydney, Taipei, Tokyo and Yangon.