What will 2021 bring for business?

Editors from New Statesman Media Group make their predictions for the year ahead.

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Prediction is a risky business. In December 2019, few would have predicted the speed and scale of change that lay around the corner (although the New Statesman's international editor, Jeremy Cliffe, did warn that “uncontrollable epidemics” were one of a set of risks that could, if compounded by “a failure of international governance and democracy”, become a global crisis).

But after a wildly unpredictable year, what do the editors-in-chief of Investment Monitor, Tech Monitor, Energy Monitor and Press Gazette see happening in their areas of expertise?

Energy

In 2020, net-zero pledges fell thick and fast from policymakers and businesses. In 2021, those ambitious words must turn into concrete actions. Expect more urgency, and demand for real action, at the UN Climate Change Conference (COP26) in November.

Joe Biden, who has promised a $2trn climate plan, is nearly in the White House; China appears committed to a 2060 net-zero goal; the necessary technologies are largely available, and finance is lining up behind a clean-energy economy. These goals should be achievable.  

Energy Monitor: 2020 has given the world an opportunity it must not waste Part of New Statesman Media Group

Biden seems prepared to hit the ground running on energy policy, having already brought together an impressive energy transition team. In the EU, the challenge will be updating climate and energy laws to implement the bloc's Green Deal, which sets a new emissions target of a 55 per cent reduction by 2030. The UK has its own bold climate and energy targets, and the global potential of green finance will be very significant to the future of the City after Brexit. The unveiling of China’s next Five-Year Plan, in March 2021, will be a decisive moment for the energy transition.

In green finance, divestment from polluting industries will continue to be an important theme, as long-term investors such as pension funds move huge sums away from fossil fuels.

Offshore wind will continue to grow rapidly, with capacity predicted to increase around tenfold by 2050. Except the hype around hydrogen to grow in 2021, too, with this agenda also re-focusing attention on carbon capture and storage (CCS).

And will transport, which changed so dramatically in 2020, return gradually to normal? Perhaps – but expect more hype around hydrogen-derived e-fuels, notably for long-distance transport, and electric vehicles, which will continue to become more widespread.

Phillippa Nutall Jones, Editor in chief, Energy Monitor.

Tech

Covid-19 shattered long-held assumptions about how and where people work, especially those with white-collar jobs. In 2021, employers will decide their post-pandemic working practices. Google has extended home-working indefinitely, and three quarters of businesses surveyed by the UK's Institute of Directors say increased remote working will remain.

Tech Monitor: The future of work will be decided in 2021 Part of New Statesman Media Group

These decisions will have far-reaching implications. Just as the eight-hour work day was enshrined in the wake of the Great War and Spanish Flu, norms established in 2021 will shape society for decades to come.

Employers should therefore be mindful of the social impact of their decisions. A widespread move to remote working could widen the social divide between white-collar and blue-collar workers. And it could open the door for a new wave of outsourcing, one that combines automation with offshoring to eliminate clerical tasks – and the jobs of people who carry them out.

Pete Swabey, Editor in chief, Tech Monitor.

Media

2020 has been tough for the news media, but nowhere near as tough as many feared when the pandemic first hit. Far from being the extinction-level event it looked like it might be, most publicly-traded news and information companies had more than recovered lost market value by the end of the year.

Next year will continue to be bumpy, not least because the exhibitions and conferences many news publishers rely on (particularly in the business-to-business media) still look uncertain. But there are plenty of positive trends for media professionals to draw encouragement from.

Online subscriptions are booming, and appear to be more or less pandemic-proof. In tough times, quality news and information appears to be something people see as essential, and worth paying for.

The tech giants have come to dominate the media, but in 2021 they will face anti-monopoly actions in the US, EU and UK. This could create a levelling of the playing field, enabling news publishers to compete more effectively for online advertising.

And there will likely be a continuation of the trend for Google, Facebook and others to pay for quality content, rather than just exploiting it for free as they have done in the past.

The departure of Donald Trump creates a problem for liberal media outlets such as the New York Times, which have thrived in opposition to the populist bogeyman. But while Trump has also outlived his usefulness for the likes of Fox News, there are already signs that new right-wing outlets are growing in the US; the appetite for controversy and conspiracy is far from sated.

Dominic Ponsford, Editor in chief, Press Gazette.

Finance

Foreign direct investment (FDI) — responsible for the creation of millions of jobs worldwide and the lifeblood of many economies — crashed in 2020, with global investment flows falling by nearly 50 per cent, according to the UN Conference on Trade & Development. The year ahead should be less perilous for FDI, with a projected 5-10 per cent decline for 2021, but much depends on the speed and shape of the coming recovery and the removal of lockdown measures. Companies are likely to continue to delay or cancel overseas expansion plans until there is more clarity.

Investment Monitor: The five big trends in global investment Part of New Statesman Media Group

Global business projects have been getting smaller in terms of headcount and investment value, and this trend is likely to continue next year, predicts Investment Monitor’s chief economist, Glenn Barklie. Companies will be taking on less office space due to the prevalence of remote working, and workforces are likely to be more scattered and less centralised in core business districts.

FDI projects will not only change in size but also in nature, with a renewed focus on incorporating sustainable development and ESG goals into companies’ international expansion plans.

The Covid-19 crisis highlighted the dangers of lengthy supply chains, and as a result many companies will be looking to reshore or “nearshore” their activities. This can have important consequences for international development as it will hit the investment attractiveness of emerging economies, which have built their industrial strategies on being cost-effective manufacturing destinations.

Most of all, the investment fortunes of nations will be linked to how well they bounce back from the crisis. Those that recover the quickest will be the most likely to see renewed investment.

Courtney Fingar, Editor in chief, Investment Monitor.

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