The annual KPMG Strategy Forum, where leaders and experts meet to gain and share insights on local and global trends, was held as a virtual event for the second year in a row. Strategy Forum brought together board members, C-level business leaders, decision-makers and strategy experts from Finland's best-performing companies to listen to and discuss with inspirational keynote speaker, Nobel-Prize winning economist Paul Krugman, and insightful panelists Inka Mero and Rob Smith. In keeping with the theme, Navigating Disruption, the event brought new perspectives on how to succeed in changing operational environments.
Krugman, one of the most famous financial experts globally, gave his views on the world, post COVID. He predicted that we would be back to the economic situation we had on the eve of the pandemic by the end of 2022, but pointed out that economic growth had been slow even before the COVID crisis. Krugman identified aging populations, decreasing investment, a general slowdown in globalization and technological development as the most significant economic challenges.
— We had a period of rapid technological progress between the mid-1990s and the mid-2000s, but so far, from the point of view of business, there haven't been any really dramatic technological changes that would generate a lot of investment demand, Krugman pointed out.
Services to drive globalization in the post-COVID world
When considering future business opportunities, Krugman emphasized two trends: the great revolution in the trading of services and the comeback of physical technology. The globalization of the service industry has been expected for the past 15 years. The pandemic is finally forcing that to happen.
— As an example, I am giving this speech from my home library in New Jersey. There are huge opportunities to accelerate the global service industry.
Regarding physical technology, Krugman pointed out that renewable energy – particularly solar and wind power and battery storage technologies – has been making radical progress and thus offers an opportunity for significant transformation. The development of renewable energy provides a lot of options to save the planet as well. According to Krugman, public investment will play a key role in this challenge.
— Despite the high levels of debt, we actually have a huge amount of fiscal space. So the opportunity is there for public investment programs aimed at energy transformation.
The next few years will be critical
In general, Krugman is still cautiously optimistic about the development of the global economy in the next few years.
— The critical question for the next five years is whether we can rise to the challenges of a world that cannot continue on the trajectory it has so far followed – both for macroeconomic reasons (because the big drivers of investment in the past will no longer work in the future) and, of course, for climate reasons.
— But I think there are business opportunities out there. They’re just not going to be the same opportunities that we were looking at pre-pandemic, Krugman concluded.
There are business opportunities out there. They’re just not going to be the same opportunities that we were looking at pre-pandemic.
The key issues affecting world businesses today
In Strategy Forum’s compelling panel discussion featuring Inka Mero, the Managing Partner and Founder of Voima Ventures, Rob Smith, the President and CEO of Konecranes, together with Krugman, some of the key issues affecting the world’s businesses and the lives of individuals today were debated – in particular, remote work and the war for talent.
When discussing whether remote work has come to stay, Mero’s opinion was that telecommuting will, in many ways, improve the efficiency of business in the future, while Smith drew attention to the fact that, instead of returning to previous ways of operating, we are building upon what people have learned during the pandemic.
— People have been more efficient and productive, which has helped them to become more innovative and to recognize that a 20 year cycle can be shortened, in some cases, to just 12 months, noted Smith.
Krugman pointed out that some things are better in a digital age, and some things are worse.
— It’s not a case of all better or nothing better. We have achieved things in a couple of decades that we wouldn’t previously have learned in a long time – because no one would have tried it. But now we have been forced to march into a new world.
A war for talent is starting
One of the biggest issues companies face today is the competition for talent and labor, and therefore, according to Mero, “talent immigration” should be part of a country’s economic policy.
— I think that policymakers should do a lot of things. A real challenge for us is how we position ourselves in Europe in this “tech war” or competition for talent.
On the other hand, Smith underscored that everything starts with a company’s vision and purpose – how it succeeds in inspiring people and making them feel they are part of a team.
— People feel motivated to work in a winning team. People want to feel like they and their company are making a difference. That is what companies should aspire to be.
Stay tuned for the next KPMG Strategy Forum in September 2022. In the meantime, KPMG Finland’s Global Strategy Group would be happy to support your organization and executive teams concerning strategy issues, and to provide further insights.