by Kirk Kardashian
January 25, 2023
What’s next in 2023? We asked a handful of Tuck faculty members what trends they were watching in 2023 and what predictions they had for business in the new year.
Corporate communication teacher
Areas of expertise
- Businesses are going to struggle to respond to pressure from right and left agitators on social issues. So far, it’s been easy to see which side makes sense. I see shades of gray coming, but the pressure is mounting in 2023. Having a strategy in place ahead of time will be key to success. Plus, not responding is a response that many executives don’t realize.
- The anti-revival arguments will grow stronger as we approach a big election year. With nearly half of states struggling with ESG investing, companies, especially those on Wall Street, will need to think about how to position their strategy to address climate change as well as other social issues in a increasingly critical environment. If they decide to retreat from their positions, they will have to face the arguments of the left. It’s a no-win situation.
- While most companies realize the central role of employees in almost every aspect of the business, few have done enough to retain top talent. In an environment where the employee holds the keys to success, why are we even more focused on just the financial aspects of the business rather than what it really takes to retain top talent (like paid sick days , who were at the heart of the railway strike)?
- Elon Musk will fail on Twitter. He really does not understand the power of the platform, nor of communication in general.
- Companies will continue to have problems justifying ESG while doing business in China, given that country’s human rights record, communist orientation and lack of concern for freedom of movement. ‘expression.
Assistant Professor of Business Administration
Areas of expertise
Predictive analytics, which helps businesses predict patterns and trends, will play a key role in making data-driven business decisions in 2023 and beyond. In the late 1990s and early 1990s, predictive analytics was primarily used by large companies that could afford to build in-house analytics departments. Since then, the number of companies using data analytics has increased dramatically. According to a market research report, over 95% of businesses today have invested in data analytics capabilities.
Predictive analytics has been used to make customer-centric decisions in banking and financial services, e-commerce and retail, healthcare, and insurance. For example, companies can use predictive models to answer questions such as the likelihood that a customer will default on a loan; or how likely a customer is to respond to a marketing campaign; or how likely a customer is to drop out or stop using a company’s services.
Artificial intelligence and machine learning are increasingly buzzwords in the industry, but at the heart of these methods is the underlying goal of improving predictive ability. The early analytics industry relied primarily on statistical methods that used columnar structured data. Over the past few years, the data available to businesses has grown both in volume and complexity, moving from structured to unstructured (e.g., textual data, audio or video files), and with a high degree of dimensionality (i.e. a large number of analysis variables).
As businesses have moved from traditional offline formats to multiple distribution and communication channels with a significant digital presence, unstructured data is readily available through online consumer reviews and social media posts.
These new data formats associated with the objective of improving prediction have required the use of more sophisticated models. Now, free and open-source programming languages such as R and Python come with preconfigured packages that are easy to deploy.
In short, now more than ever, businesses large or small can leverage the power and benefits of predictive analytics and make better business decisions. As we move forward, companies must strive to combine the art of business judgment with the science of predictive modeling for data-driven growth.
Tuck Centennial Chair in Finance
Areas of expertise
The century-old political debate over what constitutes the “best” objective of board decisions – maximizing shareholder value versus maximizing stakeholder interests more broadly – will once again take center stage, this time through the environmental, social and governance (ESG) prism Strategies. Of course, “rising water lifts all boats” or, as the Friedman doctrine was expressed in the New York Times in 1970: “The social responsibility of companies is to increase their profits. By this impeccable logic, shareholders who prefer to use corporate profits to fund social goals and other constituencies can do so if they wish.
Matthew J. Slaughter
Paul Danos Dean of Tuck; Earl C. Daum 1924 Professor of International Trade
Areas of expertise
The following prediction was originally published by the Economic Innovation Group.
The controversy of 2023 is about whether we can go further and require shareholders to fund social goals when this private offering of public goods (ESG) cannot be expected to produce the required risk-adjusted return on invested capital. The problem here is, who is going to make that decision? The management of large institutional investors such as BlackRock, the Norwegian sovereign fund of more than 1,000 billion dollars, or large pension funds, none of which seriously polls the opinion of their owners? The board of directors of companies with widely dispersed shareholders who may not even agree on the relevant definition of a “stakeholder”? Companies that can express their support for ESG objectives but have no real intention of going all the way (“greenwashing”) or, more importantly, without a comparative advantage in the provision of the public goods in question?
In 2023, the most powerful force in this raging debate will be the influence of social media. On the positive side, it will allow everyone, including shareholders, to have their opinions heard. This will allow companies to further collect and channel shareholder views, including promoting shareholder voting through electronic annual meetings. Another possible trend is the use of the corporate charter itself, such as that of “B-Corps”, which explicitly allows the board to make certain stakeholder-focused investment decisions. At least with this type of initial charter-commitment, the investors who decide to finance the company know what they can expect in terms of a private offer of public goods from the company.
To paraphrase Mark Twain, the death of globalization in general, and global supply chains in particular, has been greatly exaggerated. For so many countries and businesses, the pandemic has simply underscored that the gains from global engagement come not just from efficiency, but also from resilience.
In the new year, nations and businesses will continue to reassess which balance of global connections makes the most sense. Beyond that, here is a prediction and a hope.
The forecast is that global flows of data and ideas will continue to grow rapidly. As the McKinsey Global Institute recently reported, in the pre-pandemic decade, global flows of services, international students and intellectual property grew almost twice as fast as global flows of goods, while global data flows have exploded at almost 50% per year. year. All this global flow of information, embodied by people and also via the Internet, still harbors the potential for considerable gains.
The hope is that the United States will once again reassert its leadership in global economic policy. It doesn’t mean backtracking or trying to win popularity contests. It means working constructively with like-minded countries that share a commitment to open, rules-based markets — and working within the multilateral forums that the United States helped build generations ago and whose we have benefited so much. America’s drift towards protectionism and industrial policy is not only hurting itself but the whole world. The pandemic has done enough harm. Politics and political leadership can and should help us all overcome this.
Coxe Emeritus Professor of Management
Areas of expertise
In the past, digital giants like Google, Amazon, and Netflix have disrupted light industries like music, movies, photography, and travel. In 2023, I expect digital natives to disrupt asset-heavy industries such as agriculture, infrastructure, mining, machinery manufacturing, manufacturing, oil and gas, electricity, steel, textile production and transport.