The business scenario of future will look very different from what it is now. In this article we try to look at some major factors that influence businesses.
Impact of Technology
Emerging technologies of nanotechnology, modern biotechnology and information technology, and developments in cognitive sciences (that study how we perceive and understand things) are already generating products and services that could not have been imagined even a few years ago.
- With the possibility of changing molecular structures that nanotechnology holds out, businesses in the future might be able to offer products that have just the properties customers want
- With the insights gained into the role of genes in health and disease, modern biotechnology is likely to lead us to an era of personalized healthcare, i.e. treatment tailored to each patient's genetic structure with consequent dramatically higher effectiveness
- Developments in information technology have already given rise to numerous products and services that have dramatically changed the way we communicate and do business
- Findings of cognitive science can influence the effectiveness of the learning process, and also the ability of marketers and governments to work on our thinking and beliefs
Impact of Demographics
A 2006 article by Robert Heller on The Future of Business at Thinking Managers provides high value insights into the impact of demographics on business. Some major points made by the article are:
- The stagnant or shrinking population of Europe will affect labor supply, and lead to slower economic growth in the continent
- Different products and services will be needed by a population that is ageing, and that is increasingly guided by the "heart" than the brain
While population is not shrinking in the US, it is ageing, and the heart/brain factor is also relevant. Businesses that do not foresee the impact of these changes on their demand patterns will see profits disappearing.
Impact of Profitability Pressures
Factors such as vastly improved communications and logistics, and increased skill levels of workers in low cost developing countries enabled many businesses to shift their operations or jobs to countries such as China and India. These businesses also found new markets in the developing countries where purchasing power was increasing. These markets are likely to become bigger with increasing population in these countries (while the population in regions such as Europe tends to be stagnant or even declining).
Developed countries are likely to focus more on knowledge-intensive industries while labor-intensive industries move to developing countries. Markets will be increasingly global instead of national or regional. Online businesses are already weakening the impact of national boundaries in many regions of the world.
Business Organizations of the Future
Factors such as the following will lead to organizational structures very different from the hierarchical ones typical today. Successful businesses will be characterized by a focus on innovation in all areas, including ways of doing business, rather than by a focus on efficiency.
- Benefiting from the talent and knowledge of employees require a different approach compared to managers deciding what to do and giving orders to their subordinates, as is the case with traditional hierarchical organizations
- Modern communications are making online business transactions increasingly the standard and marketing methods and channels will have to adapt to the changing scenario
- The emergence of a powerful and influential social media has made consumers even more powerful and businesses will have to pay far greater attention to meeting customer expectations; they will also have to respond quickly to ever-changing customer preferences
- Consumers are also increasingly becoming aware of ecological issues and businesses that deliver eco-friendly solutions will gain an advantage
- Globalization of operations will require a different focus on operations management and technology-savvy operations managers
- The dramatically improved communications are also making work-at-home scenarios more common, a trend that is accentuated by the resultant savings in commuting time and costs
Business leaders who develop organizational designs that work best with the factors such as those mentioned above will gain a superior competitive advantage.
The world is changing fast with the appearance of completely new technologies, changes in population patterns, regional shifts in rates of economic development, emergence of new markets, vastly improved communications and the emergence of a powerful social media. Businesses of the future will inevitably be affected by these developments and the approach to and ways of doing business will get dramatically transformed.
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