Let us accept this statement – “the business world has changed dramatically over the last few years”. Gone are the days of giant corporations, foreign invasion of large MNCs or monopolistic economic structures being the sole influence in business and on the consumer. We live in an era which is characterised by disruptive business models, Millennial entrepreneurs and lean start-ups which can sky rocket in growth practically overnight. The paradigm shift in the business world is unprecedented and the horizons are wide open. While technological advancement, and globalisation, are some of the known forces that have massive impacted the modern business world – there are other trends which have triggered the disruptive pattern in the business world. As a result, it is indispensable for the owner of a business – big or small, to understand these trends. Darwin puts it rightly- ‘not the strongest of the species that survive, but the ones that are more adaptive to change’. Here are four dominant trends in the business world that will dominate the business world in the coming years –
The trend of shared economy may seem to have gone viral in the last one decade after prominent business models like NetFlix, UBER, AirBnB disrupted the industries. Interestingly, the idea of shared economy can date back as far as human civilisation, when humans used to exchange goods and service, aka ‘barter system’. During that time, people used to exchange their unused or surplus resources with others to get those which they were not able to produce. That taught us how we can maximise the return from the limited amount of resources at our capacity. The modern-day version of shared economy is premised on almost the similar notion of maximising the output of any product or unused skill. It is also a way to connect two groups of customers – the value creator and the value seekers. The hosting business is the value deliverer. In a way they are the value co-creator. Grounded on the same philosophy of shared economy, there are closely similar business models apparent these days – Freelancing which is also known as Gig Economy, Crowdfunding also known as Crowdsourcing. The main reasons why shared economy is becoming more popular are – flexibility, affordability, self-reliance, independence and optimum utilisation of resources.
Servitisation (selling products to (also) delivering services) of the economies
There has been a radical paradigm shift globally from manufacturing industry towards the service industry. This change has been driven by the growing trend in the emergence of service as the dominant sector in the economy. The growing ‘servitisation’ has been championed by a number of factors such as – globalisation, technology developments, changing economic structure, and above all the ever-shifting consumer preferences. Because of constant growth of the service sector, service innovation remains at the core of service research in recent times. Partially because the GDP contribution of service in the overall economy of the dominant economic forces of the world. For example – in Australia almost 80% comes from service sector. This offers a wealth of opportunities for businesses to spearhead service ideas to attract new niche. Who would have thought before that car match-making or pet-sitting would be on-demand popular business services?
Accessing entrepreneurial capital has never been easier these days with VCs, Angels and Incubators springing up almost in every corner of the world. With millions of dollars in their pocket, the funders are literally competing against each other to lend money either to help found or scale up the next disruptive business ventures. Furthermore, the state-owned pattern of economic development has started to become obsolete and there are many examples to show how government institutions have failed to provide the required support. Besides, it is also apparent that even in developed nations like Australia, the state-owned or semi-state-owned companies operate more like private companies (Transport, Telecom, Power). As a result, the rise of entrepreneurial capitalism is growing in many economies. Evidences show that solo entrepreneurs, driven by less support and more passion, has founded ventures which have outsized both largest multi-national ventures (Airbnb, the largest accommodation service provider) or state-owned public services (Uber, the largest transport service provider). With the start-up revolution in many countries, the notion of entrepreneurial capitalism is starting to mature in both developed and underdeveloped economies.
Sustainable business practice
The impact of climate change, ‘selfish acts’ of large corporations and increasing consumerism, has inevitably made it essential for businesses to act in a more responsible manner than ever before. ‘Sustainability’ is a common jargon that has taken its place in every business sector – specifically the future direction of business practices. Sustainability is reflected in a business’s ability to balance the ‘triple bottom line’, e.g. social, economic and environment issues. Regardless of the type of business, the importance of sustainable practice is absolutely essential and definitely offers a competitive edge over others who are not practicing sustainable practice. Being sustainable is not merely a business practice or way to show good citizenship behaviour, rather, it has become a potent marketing strategy. This is how Bodyshop become one of the most prominent cosmetic manufacturer, helping prevent deforestation the in Brazilian rainforest. But care needs to be taken when using the term ‘sustainable’, or other associated terminologies like – ‘organic’, ‘environmentally friendly’, ‘responsible’ etc. Consumers have become smarter than ever before and it would not take them long to ditch your brand for ‘greenwashing’, like Coca-cola is facing for their green labelled coke which is almost the identical product they currently offer.
The only thing that is constant is change – so, the status-quo mindset will only inhibit your progress. The sooner you can transform your mindset, the better it is for your business. It is not that you have to undo everything that you have done so far, but, incremental changes and planned transition can definitely lead you to success much quicker than others. So, get ready – it is time to evolve!