Geopolitical Shocks and Climate Change Will Remain Biggest Risks in 2025, Says EIU Report

"Hopes that the world will one day return to normal have been continually dashed since the covid-19 pandemic, and 2025 will be no different," the Economist Intelligence Unit (EIU) says in its Industry outlook 2025 report that explores the challenges, opportunities and trends to watch in the following six industries: energy, financial services, consumer goods and retailing, technology, automotive, and healthcare. The report further says: "Although working and travel patterns are normalizing, the economic and political outlook remains uncertain. EIU forecasts that real GDP will grow by a subdued 2.6% in 2025, similar to 2024 but slower than the average for the ten years before the pandemic." What is more, "The US economy will slow as labor markets tighten, but China's will accelerate slightly, amid stimulus and reviving trade. Those of the EU and Japan will also tick up, but only smaller developing markets such as India will deliver significant growth."

Geopolitical tensions and trade barriers will force more shifts in supply chains, amid subdued business growth. The EIU also presents the following predictions for 2025:

• Inflation is expected to ease, allowing for further monetary easing.
• Prices for agricultural and energy commodities will fall, but those for industrial raw materials will rise.
• Geopolitical risks will persist amid wars in Ukraine and the Middle East, while rising trade barriers between the EU, the US and China will reshape supply chains.
• Climate change will increase geopolitical tensions. National climate pledges will be updated at COP30 in November 2025, but much will depend on US leadership.
• Investment in technology, especially artificial intelligence (AI), will remain strong, but tech companies will face regulatory pressures, investor impatience and scrutiny over energy usage.

According to the EIU, "Falling inflation will allow monetary easing to continue. We expect the Federal Reserve (Fed, the US central bank) to cut interest rates by a further 50 basis points during 2025. We also expect prices for agricultural commodities and industrial raw materials to move in different directions in 2025- 26. Although agricultural prices will continue to trend downwards, prices for industrial raw materials will rise again, particularly for base metals that benefit from the green transition. As for energy commodities, prices will fall on average, but remain at risk from political shocks."

The UK-based company provides the following key global forecasts for each sector covered by its report:

• Energy: Fossil-fuel markets will continue to face geopolitical risks amid conflicts in the Middle East and Ukraine, but investment into renewables will remain strong, particularly in China.
• Financial services: Falling interest rates will weigh on bank profit margins, leading to lower dividend payouts, but the Basel III endgame will be eased or delayed further.
• Consumer goods and retailing: Global retail volumes will expand by 2.2%, helped by disinflation, but regulations around online retailing will tighten further, particularly for high-volume low-price Asian retailers such as Shein and Temu.
• Technology: More countries will start using satellite internet, but use cases will be limited to enterprise clients—military and maritime. Amazon's Kuiper will disrupt the market duopoly of Starlink and EutelSat OneWeb.
• Automotive: After a difficult few years, annual new-vehicle sales will reach a record 97.2m units in 2025. We forecast that sales of new cars will rise by 2%, commercial vehicles by 4% and electric vehicles by 16%.
• Healthcare: Global healthcare spending will outpace inflation, growing by 1.9% in real terms. The World Health Organization will make climate change the focus of its 14th four-year general program, which starts in 2025.

Companies and investors alike should take note that geopolitical shocks and climate change will remain the biggest risks in 2025. The EIU's "baseline forecast assumes that another large-scale war will not break out in Asia or the Middle East. However, the continued threat of geopolitical conflict, in addition to the continuing war in Ukraine, will lead to economic reconfiguration and policy divergence." Moreover, "The EU and the US are already raising barriers against Chinese exports in areas from  automotive and technology to healthcare. Chinese retaliation is likely to intensify in 2025 as rival blocs emerge across the world. These trends," according to the report's authors, "will reshape supply chains over 2025, and could upend our forecast of falling commodity prices and inflation."

Regarding climate change and how efforts to mitigate it will play in these political rifts, the report notes that "At COP30 in November 2025 governments are due to update their national climate pledges (NDCs), but much will depend on US leadership. The debate over environmental, social and governance (ESG) reporting will intensify as regulations enforcing disclosure come into effect in the EU and elsewhere." In addition, "EU climate regulations, due to come into force from 2026, will also have an international impact on trade by forcing multinational companies to monitor their supply chains."

While investment in technology, particularly AI, will be strong as projects gather pace, "technology companies will face pressure from several directions as regulations tighten (particularly in Europe), investors become more impatient for profits and their energy usage comes under more scrutiny." I agree with the EIU that "Companies will need to navigate these new requirements, while also trying to reconfigure their supply chains and seek out areas of growth."

What challenges, opportunities and trends are you watching as we celebrate the beginning of 2025?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

With the Rise of genAI in North America, GSMA Says 'Ethical Concerns Around AI Also Need to Be Addressed'

The US and Canada continue to be among the global frontrunners in 5G adoption, a testament to the significant investments by operators and the strong demand from customers for enhanced connectivity," says the GSMA in its annual report on the state of North America's mobile economy. (North America in this report as the US, Canada and the Caribbean.) The UK-based organization adds that "The rollout of 5G across North America is occurring alongside a wave of mobile network innovations and technological advancements, including the rise of generative AI (genAI), the expansion of satellite capabilities and increased network API exposure. Operators and the wider mobile ecosystem see these trends as critical to unlocking innovation and generating new revenue opportunities.

The report's key findings include:

• 5G enters its next phase: "North America continues to be a global leader in 5G. By the middle of 2024, 5G accounted for over 55% of connections in the region. 5G fixed wireless access (FWA) services have also gained significant traction, with the US reaching nearly 10 million FWA subscribers at the end of Q2 2024."
• A new chapter begins for private wireless networks: "Private wireless networks have existed for some time, but adoption had been relatively low. Thanks to evolving 4G and 5G networks, however, mobile technologies and networks can now more tightly link with enterprise needs. An improved ability to customize networks for specific enterprise use cases, facilitate greater security and enable connected machines and processes are among the many operational benefits conferred by private wireless networks. These opportunities are being explored in a range of enterprise sectors."
• Momentum builds behind aerial connectivity: "Telecoms networks remain the primary form of connectivity, supported by the wide area coverage of wireless networks and the mass production and adoption of mobile devices. In recent years, however, technological advances in various satellite and other non-terrestrial networks (NTNs) have helped to overcome several limitations associated with aerial connectivity. This has resulted in significant performance improvements, lower deployment costs and more commercially viable business models for satellite and NTN-based connectivity solutions."
• Operators take steps to fulfil generative AI's potential: "Operators in North America are adopting genAI across various domains, supporting both internal transformation and new business opportunities. Much of the focus is on deploying genAI in customer service departments to enhance employee productivity and deliver more personalized customer offers. GenAI is also being used in network management, aligning with operators' focus on improving user experience and network security. Many strategic collaborations are underway to help operators maximize the value of this new technology. However, challenges such as data privacy concerns and the shortage of skilled AI professionals remain key barriers to AI adoption."
• GSMA Open Gateway gains traction: "By June 2024, 53 operator groups had signed up to the GSMA Open Gateway, representing 240 mobile networks and accounting for 67% of mobile connections globally. Between the participating operators, all regions are covered; AT&T, Dish, Rogers, T-Mobile US and Verizon are among the operators in North America that have signed up to the initiative. Many of the early API launches around the world have focused on fraud prevention and security, using SIM Swap and Number Verification. These represent easy wins, given the ever-present risks from fraudsters and breaches for operators and their customers. Other parts of the API library are also being deployed, as evidenced by the work done by US operators and drone manufacturers to test the Device Status API."
• Policies for success: "Continued mobile evolution depends on the expansion of operators' mobile spectrum holdings across low, mid- and high bands to deliver speed, capacity and geographical coverage. Additional spectrum can boost the provision of cost-efficient investment and enhance network quality in North America, which can support mobile to grow its role in regional economic development strategies."

Infographic: GSMA Intelligence

The report importantly points out that "Ethical concerns around AI also need to be addressed." The GSMA asserts that "The mobile industry is committed to the ethical use of AI in its operations and customer interactions to protect customers and employees, remove any entrenched inequality and ensure that AI operates reliably and fairly for all stakeholders." Moreover, "The GSMA's AI Ethics Playbook serves as a practical tool to help organizations consider how to ethically design, develop and deploy AI systems. Increased collaboration between policymakers can also help private sector organizations establish appropriate AI guidelines. To support this outcome, the EU AI Office and the US AI Safety Institute recently announced they will work together on tools to evaluate AI models."

As for the mobile industry's impact on the UN Sustainable Development Goals, the report says its "most recent analysis shows that the mobile industry continues to achieve its highest impact on SDG 9: Industry, Innovation and Infrastructure, driven by the increased reach of mobile networks and growing take-up of mobile internet services." What is more, "Progress has also been made in reducing disparities in mobile internet adoption between different user segments, supporting the industry's contribution to SDG 5: Gender Equality and SDG 10: Reduced Inequalities."

What do you think of the report's findings? What are your recommendations for how to ethically design, develop and deploy AI systems?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

Growth Prospects, Risks and Trends in Six Critical Sectors in 2024

The past few years have been turbulent for most companies as the pandemic, soaring commodity prices, high interest rates and political disruption resulted in profits for many and bankruptcy for some. A report published by the Economist Intelligence Unit (EIU) asks: Will conditions stabilize in 2024?

EIU's report provides growth prospects, risks and trends facing six critical sectors in the coming year, as inflation eases but geopolitical tensions remain high. The report argues that the biggest challenge facing businesses next year will be climate change and looks at how experimentation with artificial intelligence will give way to rapid adoption, changing corporate strategies and the nature of work.

Key findings include:

• Climate change will drive demand in sectors relating to mitigation and adaptation. Insurers, companies and governments will struggle to price in the increasing risks.
• EU and US regulations on environmental, social and governance (ESG) reporting will push companies to scrutinize their operations and supply chains. However, skepticism about ESG will harden in the US ahead of November’s presidential elections.
• Corporate concerns over taxation will increase as the OECD introduces its global minimum tax rate and individual governments try to reduce budget deficits and national debt levels.
• Geopolitical tensions and wars will complicate government and corporate responses to all of the above. Investment in supply chains, particularly for technology and the energy transition, will adapt to minimize political risk.
• Generative artificial intelligence will disrupt a few sectors, but most companies will find ways to use AI to increase productivity.

The report also provides key global forecasts for each sector covered:

• Automotive: The automotive industry will face another subdued year in 2024, weighed down by slow consumer spending, high interest rates and disruption to supply chains due to geopolitical tensions. The only bright spot will be the electric vehicles market, with sales expected to soar by 21% to 14.9 million unit as governments and consumers try to mitigate the worsening effects of climate change. The report notes that established carmakers will have to fight hard to hold off competition from China.
• Consumer goods and retail: A slowdown in inflation will bolster retail volume growth by 6.7% in US dollar terms and 2% in volume terms in 2024. However, reduced savings and high food prices, worsened by the effects of climate change, will act as dampeners. The EIU also points out that high food prices will continue to cause problems in Asia.
• Energy: Global energy consumption will grow by 1.8% in 2024, largely driven by strong demand in Asia. Despite still-high prices and unsolved supply chain disruptions, demand for fossil fuels will reach record levels, but demand for renewable energy will rise by 11%.
• Finance: High interest rates will determine the success or failure of almost every part of the financial services sector in 2024. Though painful for borrowers, banks will enjoy strong net interest margins margins and revenue flows until margins begin to narrow mildly in late 2024. Property firms and funds, however, will suffer.
• Healthcare: Healthcare spending will rise by 2% in real US-dollar terms, following two years of decline, as inflation eases. However, resources will remain constrained as governments try to bring down fiscal deficits and public debt levels.
• Telecoms and technology: Geopolitics will continue to affect technology in 2024. The tech battle between the US and China will persist in areas including artificial intelligence (AI), chips and quantum technologies. AI will continue to develop, particularly generative AI, but will encounter challenges from new regulations in the EU and other major jurisdictions, as well as complications from US-China tensions.

I appreciate how the annual industry outlook provides businesses with foresight of the critical global trends and threats that will affect their sector 2024. Which trends and threats are you watching in the coming year?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

5G Will Represent 91% of Mobile Connections in North America by 2023, Up From 39% in 2022

"The US and Canada are among the global leaders in terms of 5G adoption, reflecting the ambitious rollout plans of operators and strong demand from consumers for new services," the GSMA says in its latest report on the state of North America's mobile economy. "However, following extensive 5G network buildout over the last few years, capex levels will begin to trend downwards as operators turn their attention to generating a return on investment." The UK-based organization, which represents the interests of mobile operators worldwide, adds: "The focus over the next few years will be on improving 5G coverage in less densely populated areas while also ramping up investment to support the growing momentum behind use cases enabled by 5G standalone (SA) and 5G-Advanced."

The report's findings include:

The 5G monetization imperative grows

"As 5G adoption grows, the monetization imperative will escalate. GSMA Intelligence research shows that the mobile ARPU trend in the US and Canada improved in the 12 months after launching 5G. The technology is also having a positive impact on revenue growth for North American operators beyond mobile services, as highlighted by fixed wireless access (FWA) momentum in the region. Looking forward, the enterprise sector is expected to be the main growth driver for operators. 5G SA brings a host of new capabilities that will be crucial to monetizing 5G investments, including improved support for network slicing. There are also synergies between 5G SA and private wireless networks, opening up new opportunities for mobile operators."

Generative AI takes center stage

"Mobile operators have utilized AI for a while now to varying degrees. However, the emergence of generative AI has pushed the envelope on AI capabilities and thrust AI technology into boardroom conversations globally. With generative AI tools, operators can attempt to automate more complex customer service functions that require a better understanding of context, improved ability to follow a conversation and advanced synthesis of information. The technology can also be used to improve network operations and deliver personalized service plans. However, ethical concerns around the technology still need to be addressed. AI regulation will therefore continue to move up the policy agenda as governments develop frameworks for regulating the use of new AI tools."

eSIM momentum builds

"The last few years have been crucial for eSIM development and commercialization, highlighted by Apple’s launch of eSIM-only smartphones in September 2022 in the US and Canada. There has since been an acceleration in operator eSIM deployments and commercial launches. However, eSIM awareness among consumers remains limited. As the main contact points with end users, operators and smartphone manufacturers have a key role to play in accelerating consumer awareness and adoption. Additionally, eSIM technology has long been seen as a major enabler and accelerator of IoT deployments across multiple sectors. This has led North American operators to partner with a range of players across the IoT ecosystem to accelerate eSIM adoption in the region."

Infographic: GSMA

The shift towards circularity gains traction

"The concept of circularity has risen up the agenda for policymakers and industry players in light of growing concerns around the generation of e-waste and unsustainable levels of consumption of natural resources. Although the technical lifespan of a mobile device is now between four and seven years, the average use period of mobile devices is only around three years. Governments and industry players have a role to play in incentivizing consumers, such as by building new channels for suppliers to collect, refurbish and resell devices and implementing awareness campaigns on sustainability. Operators and other ecosystem players in North America are already taking a lead in this regard, with a number of initiatives to drive circularity in mobile phones and other digital devices."

Growing opportunities for operators as fintech demand surges

"GSMA Intelligence survey data shows that between 2020 and 2022, the share of 4G/5G smartphone users in the US using their devices for financial services on a daily basis grew by four percentage points on average across mobile banking, online shopping, paying bills and contactless payments. This reflects growing momentum behind digital financial services as the competition heats up in the fintech market. For example, Apple recently announced the launch of a buy now, pay later (BNPL) service, which should contribute to a boost in e-commerce transactions. It has also launched a high-yield savings account through a partnership with Goldman Sachs, which reportedly brought in $990 million in deposits over its first four days. By the end of the first week, around 240,000 accounts had reportedly been opened."

Policies for growth and innovation

"The success of 5G rollouts depends on operators' 5G spectrum holdings across low, mid- and high bands to deliver both speed and geographical coverage. Additional spectrum can boost the provision of cost-efficient investment and enhance network quality in North America, which can help 5G become a central pillar of the region’s economic development strategies."

Infographic: GSMA

GSMA points out that "5G connectivity is already proving to be a powerful driver of GDP growth, with 5G's contribution to GDP in North America expected to surpass $200 billion in 2030 (16% of the overall annual economic impact of mobile in the region)." What is more, "Beyond its contribution to GDP, the mobile ecosystem also supports 2.1 million jobs (directly and indirectly) and makes a substantial contribution to the funding of the public sector, with $130 billion raised through taxation in 2022. This economic contribution underlines the importance of stakeholders taking the right steps to sustain the impact of mobile services on the digital economy, with spectrum availability a key driver of affordable 5G for all."

What do you thinking of the report's findings? Do you see the North American mobile sector more attractive for investment compared to other geographic markets?

​Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

Challenges, Opportunities and Trends to Watch in Seven Sectors in 2023

"The continuing pandemic, the war in Ukraine and high inflation have forced many companies to scale back their forecasts" in 2022, the Economist Intelligence Unit (EIU) notes. Will 2023 will be any better?

The 12th edition of the EIU's annual report forecasts growth and key risks in seven business sectors for 2023, as the war in Ukraine pushes up commodity prices and the cost of living. The report argues that the war has disrupted the recovery from the covid-19 pandemic, and businesses now face increased risks as economies slow or tip into recession, particularly in Europe.

The EIU's report also provides key global forecasts for each of the seven industries:

• Global sales of new vehicles will be flat in 2023, but sales of electric vehicles will rise by 25% to 10.7m units.
• In 2023 retail growth volumes will be respectable at 4.9% in US-dollar terms, which will mainly reflect high inflation. In real terms, global sales will slow or fall in most markets.
• Global energy consumption will rise by just 1.3% as the global economy slows. The energy crisis will force some countries to increase their use of coal or rethink plans to phase out nuclear power.
• Weakening economic output and rising interest rates will lead to more difficult conditions for banks, insurers and fund managers. Formerly fast-growing fintech companies will be hit by the capital-market crunch.
• Global healthcare spending will rise by 4.9% year on year in US-dollar terms, which will mask falling investment in real terms, as countries struggle to cope with continued demand.
• The metaverse will not become a mass-market in 2023, but this will not stop heavy investment into this technology. The drive to standardization and the battle with web3 will be at the forefront.
• International tourism arrivals will rise by 30% as China slowly loosens its covid-19 restrictions. This will follow 60% growth in 2022, but will still leave total arrivals below 2019 levels.

The EIU also presents the following key forecasts for each industry:

Automotive outlook 2023: Bright spots amid stalling growth

• 
  The automotive industry will remain vulnerable to global headwinds in 2023 including the energy crisis, slower global demand and continued supply-chain problems.
• Global new-vehicles sales will remain flat in 2023: new-car sales will rise by 0.9% and new commercial vehicle (CV) sales will fall by 1.3%.
• Sales of electric vehicles (EVs) will be the only bright spot, growing by 25%, but governments will restructure their incentive schemes.
• Governments' focus will turn to charging networks, which are inadequate to meet the expanding EV fleet.
• Autonomous vehicles will take a leap forward, as UN regulators lift their speed limit.

Consumer goods and retail outlook 2023: Retailers respond to pricing pressures

• 
  Inflation will push up global retail sales by a robust 5% in US-dollar terms in 2023, but the lower volume of sales and surging costs will weaken retailers' profits.
• The rollout of automation technologies will offer opportunities to limit wage growth, which means that retail employment is unlikely to return to 2019 levels.
• Online sales growth will slow, but the online share of retail will edge up to about 14% of global retail sales.
• Inflation-wary consumers will prefer to shop at discount stores, helping these retailers to increase their market shares.
• The economic slowdown in China, caused in part by its zero-covid strategy, will mean fresh challenges for global luxury brands already affected by the loss of Chinese tourists.

Energy outlook 2023: Surviving the energy crisis

• 
  Global energy consumption will grow by only 1.3% in 2023 amid a slowing economy.
• Despite decarbonization targets, coal consumption will grow marginally to compensate for gaps in gas supplies.
• More extreme weather events will force many countries to fall back on fossil fuels, delaying the energy transition.
• Renewable energy consumption will surge by about 11%, with Asia leading the way, but investment will weaken.
• The energy crisis will prompt some governments to backtrack on efforts to phase out the use of nuclear power.

Finance outlook 2023: A new test for financial stability

• 
  Weakening economic output and rising interest rates will lead to more difficult conditions for banks, insurers and fund managers in 2023 than in the past two years.
• The impact will be particularly acute in North America and Europe, where governments will offer support. The environment will be tough in Asia as well, although policy rates will rise by less.
• Heavily indebted developing countries will find it harder to refinance foreign debt, driving some to default or require rescues to avoid it. However, the International Monetary Fund will continue its lenient treatment of economies requiring its financing programs.
• The current capital-market crunch will hobble a wide variety of loss-making fintech challengers that sought to outflank incumbents in banking, payments and other activities.

Healthcare outlook 2023: The aftermath of the pandemic

• 
  Healthcare spending will fall in 2023 in real terms, given high inflation and slow economic growth, forcing difficult decisions on how to provide care.
• Digitalization of the healthcare system will continue, but the use of health data will come under stricter regulation in the US, Europe and China.
• Patent cliffs for key drugs and measures to control pharmaceutical pricing in the US, India and elsewhere will force some major pharma companies to spur growth through deals.
• Supply-chain disruptions will continue to push up drugmakers' costs, despite investment in more localized pharmaceutical production.

Technology and telecoms outlook 2023: The battle for digital supremacy

• 
  The metaverse will not become mass-market in 2023, but this will not stop heavy investment in the technology. The drive to standardization and the battle with web3 will be at the forefront.
• Artificial intelligence (AI) will continue to develop, after several breakthroughs in 2022, but will encounter challenges from new regulations in key jurisdictions.
• Semiconductors will continue to be a geopolitical tool between the US and China, involving many other countries. Some companies producing the most advanced products and equipment will benefit.
• Asian telecommunications companies will continue to look for consolidation in 2023. Mobile markets with four or more mobile network operators, such as Sri Lanka, Japan and India, are the most likely to secure deals.

Tourism outlook 2023: Turbulence in the travel industry

• 
  Global tourism arrivals will rise by 30% in 2023, following 60% growth in 2022, but they will still not return to pre-pandemic levels.
• The economic downturn, sanctions on Russia and, above all, China’s zero-covid strategy will be among the factors weighing on the industry.
• Hotels, restaurants and airports will struggle to cope with labor shortages, wage demands, and high food and energy prices.
• Even so, international airlines are expected to return to profitability, benefiting from continued pent-up demand.
• The impact of climate change on the industry will become more apparent, with high temperatures, water shortages and floods forcing tourism destinations to take action.

Useful for companies developing their global business strategy for the coming year, the report presents the following macroeconomic key points:

• The war in Ukraine, combined with lockdowns in China, has exacerbated supply-chain disruptions and pushed up global inflation, forcing EIU to downgrade its forecasts for economic growth in 2023.
• Many governments, particularly in Europe, will be forced to scale back investment in public services, including healthcare, in order to protect households and businesses from the effects of higher prices.
• While some businesses (particularly in commodities sectors) will benefit from high prices, many will be hit by weak demand and high input costs, particularly for energy.
• Profitability will be squeezed, while corporate investment will slow amid rising interest rates.
• However, some companies (notably in pharmaceuticals, technology and retailing) will take advantage of lower stock-market valuations, bankruptcies and government incentives to snap up strategic assets and position themselves for an eventual upturn.

"Amid all this gloom," the EIU encouragingly says "there will be areas of opportunity." Taking the EV market as an example, "online retail sales and tourism will continue to deliver strong growth, particularly in Asia and the Middle East," the report notes. "Innovations—from the metaverse to automated vehicles and data analytics (notably in healthcare)—will attract investment, with some companies also seizing on chances offered by volatile financial markets." I concur that "It will not be an easy year, but it could be a transformative one."

Lastly, The Economist produced a video that looks into which stories may be worth watching in the coming year.

What will you be watching in 2023?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

North America's Metaverse Ecosystem is Growing Says Annual Report on Key Trends Shaping the Region's Mobile Industry

"Mobile networks are vital to economic recovery and the realization of green and digital transformation across North America," the GSMA asserts in its annual report on the state of North America's mobile economy. What is more, "In 2021, the US Congress passed an infrastructure bill, which allocates about $65 billion in federal funding toward expanding broadband access and 5G connectivity nationwide. In Canada, the government has recently established the Universal Broadband Fund, a CAD2.75 billion ($2.1 billion) investment to support high-speed internet projects across the country, including mobile internet projects in underserved areas. These developments highlight the opportunity for operators to partner with governments to improve connectivity across society and drive post-pandemic economic recovery."

According to research provided by GSMA Intelligence, there are 214 operators from 81 countries offering commercial 5G services. Across North America, which is defined as the US, Canada, and the Caribbean (GSMA includes Mexico in its Latin America report), the report shows that 5G will account for almost two-thirds of total mobile connections by 2025, the equivalent of nearly 280 million connections. The report also explains how 5G's upward trajectory was boosted by several factors such as economic recovery from the pandemic, rising 5G handset sales, and overall marketing efforts. In addition, the report highlights mobile connectivity's role in contributing to the economy and social well-being.

The report's other key findings include:

• The North American mobile ecosystem directly generated around $300 billion of economic value in 2021, with mobile operators accounting for the majority
• Mobile operators continue to innovate in addressing the digital divide, driving the industry's contribution to multiple UN SDGs, including SDG 9: Industry, Innovation and Infrastructure and SDG 10: Reduced Inequalities
• In 2021, the mobile ecosystem directly employed more than 850,000 people in North America and supported another 1.4 million jobs indirectly
• In 2021, the mobile ecosystem contributed almost $110 billion to the funding of the public sector through consumer and operator taxes
• 5G set to overtake 4G in 2023 to become the dominant mobile technology in North America
• By 2025, smartphones will account for nearly 9 in 10 connections on average in North America
• North America is home to some of the world's biggest consumers of mobile data
• As 5G rises, 4G declines, but adoption will continue to rise across the Caribbean for the foreseeable future
• In the first five months of 2022, more than $120 billion was invested in building out metaverse technology and infrastructure, more than double the $57 billion invested in 2021

Infographic: GSMA

With respect to the growth of North America's metaverse ecosystem, while "still nascent," the GSMA says "the significant levels of investment in metaverse initiatives and market-size estimates reflect the opportunities possible from the rapid advancement of the metaverse over the coming years." For those unfamiliar with the term, the metaverse is simply defined as a virtual-reality space in which users can interact with a computer-generated environment and other users.

The report adds that "The metaverse ecosystem is growing in many countries around the world, including in North America. In the US and Canada, public and private institutions are increasingly establishing a presence in the metaverse and actively utilizing the platform in their engagement with customers and other stakeholders. For example, the US military relies on a series of metaverse or metaverse-adjacent virtual reality programs for a variety of applications, from training to healthcare; KPMG's US and Canadian member firms jointly launched a metaverse collaboration hub to support employee and client journeys into Web 3.0; and Barbados has signed an agreement with Decentraland to outline the baseline development elements for its metaverse embassy."

The fashion retail sector will present use case opportunities for the metaverse. "Brands around the world have taken notice of the metaverse because they believe it will usher in the next age of consumerism," the report explains. "Well-recognized brands, such as Balenciaga, Gucci, Louis Vuitton and Nike, have already began collaborating with platforms similar to the metaverse in order to reach a broader audience. The Metaverse Fashion Week hosted on Decentraland in March 2022 speaks to the potential for different use cases across retail."

The GSMA, however, points out some challenges North America's mobile industry may encounter in the near-future. After a swift recovery from the impact of the pandemic, mobile revenue in North America is facing renewed pressure from macroeconomic challenges, notably inflation. In addition, capital expenditures will decline in the coming years following initial investments in the rollout of 5G networks.

What do you think of the report's findings? How are you taking advantage of the growth of 5G adoption while mitigating the macroeconomic risks that may impact North America's mobile industry?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

2022 Will (Hopefully) Be a Year of Recovery and Renewal for Economies and Businesses Affected by Covid-19

"2021 was supposed to be a year of recovery for economies and businesses that had been affected by the coronavirus (Covid-19) pandemic," according to The Economist Intelligence Unit's annual report that examines the opportunities and challenges ahead for seven sectors of the global economy: automotive; consumer goods and retailing; energy; financial services; healthcare and pharmaceuticals; technology and telecoms; and tourism. "However, it has not been a straightforward rebound. Although coronavirus vaccines allowed many countries to ease lockdowns and begin a recovery, cases remained stubbornly high, albeit with an improved recovery rate. International borders remained either shut or subject to cumbersome testing requirements. One knock-on effect was supply-chain disruptions that hampered companies' ability to meet consumer demand, pushing up prices. Many of these problems will persist into 2022."

Businesses operating in these seven sectors should note that "[g]rowth prospects for all these sectors in 2022 will depend on their respective base levels. Some sectors—notably, telecoms and pharmaceuticals—thrived during the pandemic, but will need to navigate evolving consumer demands, as well as increased competition and regulation going forwards. Some sectors—notably, automotive and tourism—suffered slumps and will struggle to deal with the aftermath. For the remainder, the situation and outlook remain mixed, with companies pushing against headwinds to reach areas of opportunity."

The report presents the following key forecasts:

• Supply-chain disruption will make it harder for manufacturers and retailers to meet recovering demand, dampening sales forecasts for both consumer goods and automotive.
• High prices will push up interest rates, which could raise bad debt levels and dampen demand. However, some consumer companies and banks will turn higher prices to their advantage.
• New technologies - both digital and non-digital - will offer new opportunities, but will also attract more attention from regulators keen to ensure a level playing field. Health apps will be among those affected.
• Companies will need to prepare for changes in tax regulation, following a global deal to set a minimum corporate tax rate. Although this legislation may be derailed, efforts to collect taxes are increasing.
• Amid efforts to combat climate change, companies will come under more pressure to cut emissions and meet more standardized reporting requirements. This will affect their investment strategies, particularly in the oil and coal sectors.

In addition, below are the key forecasts as they relate to each of the aforementioned seven sectors of the global economy:

Automotive in 2022: back to near-normal

• Global sales of new vehicles will rise by 7.5% in 2022, taking them back past 2019 levels. The recovery will be led by Asia and North America.
• Many vehicle makers will still struggle to meet recovering demand amid continuing supply-chain disruptions.
• Global sales of new electric vehicles (EVs) will continue to soar, rising by 51%. New emissions rules will force carmakers to make far-reaching decisions about their fossil-fuel models.

Consumer goods in 2022: knots in the supply chain

• Global retail sales will recover to 2019 levels in volume terms, but coronavirus (Covid-19) cases, inflationary pressures and slow job growth will pose challenges.
• Online shopping will grow at a slower pace in 2022 as lockdowns lift, but will still account for 17% of global retail sales.
• Higher supply-chain costs will motivate businesses to wean consumers off discount schemes and focus on higher-margin premium products.

Energy in 2022: transition time

• Global energy consumption will rise by 2.2% as economies recover from the impact of the pandemic. All types of energy, apart from nuclear power, will benefit.
• Energy prices will stay firmer than in recent years, as demand recovers and supply bottlenecks continue to disrupt power generation.
• Many energy companies will need to undertake an urgent review of their strategies in 2022, as governments and investors ramp up pressure to cut emissions.

Finance in 2022: gusty tailwinds

• Economic recovery and rising interest rates will boost prospects for many financial firms in 2022, provided bad loans remain at manageable levels.
• Developing markets will take longer to regain their appeal than developed ones. Regulatory uncertainties in China will throw up challenges in the world’s fastest-growing market for financial services.
• Green finance will move towards center stage, as companies and investors try to live up to pledges made at the COP26 climate summit.

Healthcare in 2022: the aftermath of coronavirus

• Global healthcare spending growth will slow to 4.1%, despite rising costs, as governments start to assess the economic damage wreaked by the pandemic.
• Vaccinating the world against Covid-19 (coronavirus) will remain a core priority. However, healthcare systems will also need to start tackling a backlog of non-coronavirus care.
• Healthcare is not exempt from supply-chain problems, and governments will push ahead with regulation designed to increase resilience and lower costs.

Technology and telecoms in 2022: geopolitical tensions

• Of 60 major telecoms markets, 16 will launch 5G services in 2022 (see map below), but challenges in spectrum availability and pricing will cause delays.
• Technology and politics will continue to be interlinked. The semiconductor shortage will persist, making onshoring of chip production a strategic priority for countries.
• Governments will tighten regulations to boost cyber security, which will be the main short-term risk to digitalization progress, but discrepancies between countries will often dilute the impact.

Tourism in 2022: a shaky recovery

• International arrivals will recover some ground but fail to return to 2019 levels, with business travel likely to remain depressed.
• Differing levels of border control and variations in vaccine passports will continue to make international travel difficult in 2022, although domestic tourism will fill some gaps.
• Compliance with climate-change regulations, as well as higher fuel prices and wages, will increase air-travel costs in 2022. This will eventually lead to airline mergers, airport closures and higher ticket prices.

Lastly, with respect to its macroeconomic forecast, The EIU asserts that "the global economic recovery will continue in 2022, with real GDP expanding by 4.1% at market exchange rates, after rebounding by an estimated 5.4% in 2021. Of the G20 countries, China and Turkey were the only two not to shrink in 2020 and will continue to post firm growth. Eight more, led by the US, have already regained their 2019 GDP levels in real terms, following a strong rebound. The remaining ten, including EU countries and Japan, will regain pre-pandemic levels in 2022, having lost two years of growth."

The report, however, points out that the "recovery could still be derailed if the pandemic flares up again. Persistent supply-chain disruptions could keep commodity prices elevated. This will benefit commodity-dependent countries, but will fuel inflation. That, in turn, will lead to tightening monetary policy, with impacts on stock markets, banks, companies and governments. Geopolitics will remain fraught too: the EIU sees an escalation in US-China tensions as the biggest global risk."

Twelve months ago as my colleagues and prepared to close-out 2020, we anticipated 2021 would be a year of recovery and renewal. While some sectors such as technology and pharmaceuticals have seen a healthy rebound, the automotive and tourism sectors struggled during the past year. And the consumer goods, energy, finance, and healthcare sectors had a mixed year as they seek out new areas of opportunity. In the coming year, we will be watching the global vaccination rate, the rise of any potential variants of covid-19, and how governments respond to new outbreaks. We will also monitor how governments and central banks continue their efforts to stimulate economic growth while curtailing inflationary pressure.

What will you be watching in 2022?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

Report Says North America's Mobile Sector Is Showing Climate Leadership in Helping Achieve UN's Climate-Related Sustainable Development Goals

According to its latest report on the state of the mobile economy in North America, GSMA Intelligence says that "[b]y the end of 2020, 327 million people in North America subscribed to mobile services, representing 83% of the region's population. This places North America among the world's most developed mobile markets. However, increasing market saturation also means that subscriber growth is slowing, a scenario that is also occurring in other advanced markets around the world."

GSMA Intelligence, the research arm of the GSMA, a UK-based organization that represents the interests of mobile operators worldwide, further asserts: "By the end of 2025, 5G will account for almost two thirds of total mobile connections, which is equivalent to nearly 270 million connections. 5G will also account for 98% of mobile capex over the next five years as operators step up deployments of mid-band spectrum."

Operators in the region are looking to bring new suppliers and technologies into the network. "The GSMA Intelligence Operators in Focus survey indicates that expanding 5G coverage and open RAN deployments are the top RAN priorities in North America, while virtualization investments, security and edge computing are crucial for the core network," the report explains.

With respect to policies enabling digital advancement, the report suggests the "speed, reach and quality of 5G services depends on governments and regulators supporting timely access to the right amount and type of affordable spectrum, under the right conditions. Policy also has a role to play in the shift towards open and virtualized networks, by creating an enabling environment that will support the deployment of new RAN infrastructure."

Other key findings include:

• Mobile operators in North America will invest $300 billion in their networks between 2020 and 2025, of which 98% will be dedicated to 5G.
• 5G coverage and open RAN top RAN priorities, while virtualization investments and security are critical for the core network.
• Despite growing confidence in open and virtualized RAN, there is recognition that accelerated measures are needed to ensure equipment interoperability, security, reliability, and sufficient systems integration capabilities and skills.
• As indicated in the chart below, the urgency to deploy IoT projects is stronger in the U.S. than in other countries, with around two in five companies planning to deploy IoT within a year, and one in five targeting deployments within two years. "The pandemic has increased the urgency of enterprise digitization among many firms as they look to boost productivity and efficiency, which will escalate adoption of IoT, AI and 5G, among other technologies."
• The UN's Race to Zero campaign declared that the mobile industry made a critical 'breakthrough' in early 2021, as more than a third of operators by revenue had committed to achieving net zero emissions by 2050 or earlier.

Regarding the mobile sector's efforts to help achieve the UN's climate-related sustainable development goals (SDGs), GSMA Intelligence says "North American operators are making strong progress on SDG 13: Climate Action, with mobile at the forefront of efforts to tackle climate change." Furthermore, "at the end of 2020, 80% of operators by revenue disclosed their climate impacts, while almost two thirds of operators by revenue had set science-based targets to cut their carbon emissions rapidly over the next decade. In North America, several operators have set a science-based target of 1.5°C, which is in line with an ICT sectoral target-setting approach recently developed through a collaboration between the Global Enabling Sustainability Initiative (GeSI), the GSMA, the International Telecommunication Union (ITU) and the Science Based Targets Initiative (SBTi). These targets support the Paris Agreement’s central aim of strengthening the global response to the threat of climate change."

Lastly, "Switching to renewable energy will play an essential role in the mobile industry reaching net-zero carbon emissions. Most emissions within the direct control of operators are from electricity and diesel consumption by power networks."

In addition to switching to renewable energy, how can North America's mobile sector help achieve climate-related SDGs including including SDG 7: Affordable and Clean Energy, SDG 11: Sustainable Cities and Communities and SDG 15: Life On Land?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

Democracy Was Dealt a Major Blow in 2020, Says EIU Report

"Democracy was dealt a major blow in 2020," according to a report produced by The Economist Intelligence Unit (The EIU). Providing "a snapshot of the state of democracy worldwide in 165 independent states and two territories," the 13th edition of the Democracy Index, which was edited by Joan Hoey, Regional Director, Europe at The EIU, "covers almost the entire population of the world and the vast majority of the world's states (microstates are excluded)." The report disappointingly records a decline in their overall score, as country after country locked down to protect lives from a novel coronavirus.

The EIU explains that its "Democracy Index is based on five categories: electoral process and pluralism, the functioning of government. political participation. political culture, and civil liberties. Based on its scores on a range of indicators within these categories, each country is then itself classified as one of four types of regime: 'full democracy.' 'flawed democracy,' 'hybrid regime' or 'authoritarian regime.'"

What is more, "The main focus of the report is the impact of the coronavirus (Covid-19) pandemic on democracy and freedom around the world. It looks at how the pandemic resulted in the withdrawal of civil liberties on a massive scale and fueled an existing trend of intolerance and censorship of dissenting opinion. The report also examines the state of US democracy after a tumultuous year dominated by the coronavirus pandemic, the Black Lives Matter movement and a hotly contested presidential election. The results by region are analyzed in greater detail in the section entitled 'Democracy around the regions in 2020.'"

As indicated in the table above, "only about half (49.4%) of the world's population live in a democracy of some sort, and even fewer (8.4%) reside in a 'full democracy,'" according to The EIU's measure of democracy. "[T]his level is up from 5.7% in 2019, as several Asian countries have been upgraded. More than one-third of the world's population live under authoritarian rule, with a large share being in China."

The report adds that "75 of the 167 countries and territories covered by the model, or 44.9% of the total, are considered to be democracies. The number of 'full democracies' increased to 23 in 2020, up from 22 in 2019. The number of 'flawed democracies' fell by two, to 52. Of the remaining 92 countries in our index, 57 are 'authoritarian regimes,' up from 54 in 2019, and 35 are classified as 'hybrid regimes,' down from 37 in 2019."

Discouragingly, The EIU notes: "democracy has not been in robust health for some time. In 2020 its strength was further tested by the outbreak of the coronavirus (Covid-19) pandemic. The average global score in the 2020 Democracy Index fell from 5.44 in 2019 to 5.37. This is by far the worst global score since the index was first produced in 2006." Furthermore, "The 2020 result represents a significant deterioration and came about largely—but not solely—because of government-imposed restrictions on individual freedoms and civil liberties that occurred across the globe in response to the coronavirus pandemic."

In explaining the map above, The EIU says:

The deterioration in the global score in 2020 was driven by a decline in the average regional score everywhere in the world, but by especially large falls in the "authoritarian regime"-dominated regions of Sub-Saharan Africa and the Middle East and North Africa. Their scores declined by 0.10 and 0.09, respectively, between 2019 and 2020. Western Europe and eastern Europe both recorded a fall in their average regional scores of 0.06. The score for Asia and Australasia, the region which has made the most democratic progress during the lifetime of the Democracy Index, fell by 0.05. Latin America's average score declined by 0.04 in 2020, marking the fifth consecutive year of regression for the region. The average score for North America fell by only 0.01, but a bigger decline of 0.04 in the US score was masked by an improvement in Canada's score.

In 2020 a large majority of countries, 116 of a total of 167 (almost 70%), recorded a decline in their total score compared with 2019. Only 38 (22.6%) recorded an improvement and the other 13 stagnated, with their scores remaining unchanged compared with 2019. There were some impressive improvements and some dramatic declines . . . with Taiwan registering the biggest improvement and Mali the biggest decline. There were 11 changes of regime category, seven negative and four positive. Three countries (Japan, South Korea and Taiwan) moved from the "flawed democracy" category to be classified as "full democracies" and one country, Albania, was upgraded to a "flawed democracy" from a "hybrid regime" previously. France and Portugal experienced a reversal, losing the "full democracy" status they had regained in 2019, re-joining the ranks of "flawed democracies." El Salvador and Hong Kong were relegated from the "flawed democracy" classification to that of "hybrid regime." Further down the ranking, Algeria, Burkina Faso and Mali lost their status as "hybrid regimes" and are now designated as "authoritarian regimes."

With a score of 9.81, Norway ranks #1 in the Democracy Index followed by Iceland (9.37), Sweden (9.26), New Zealand (9.25), and Canada (9.24). Rounding out the bottom five are Chad (1.55), Syria (1.43), Central Africa Republic (1.32), Dem. Republic of Congo (1.13), and North Korea (1.08) as the least democratic nation. As a citizen of the United States (7.92), I am disappointed to find my home country classified as a "flawed democracy" with a ranking of 25.

During a webinar to discuss the findings of the Democracy Index, Ms Hoey explained that the aim of the Democracy Index is not aimed to serve as an advocacy tool but to "provide an independent and robust measure of the state of democracy around the world and to shine a light on positive and negative developments. In doing that, we can play a role in holding governments to account." She added: "I think we also would like to stimulate a debate about the problems of democracy and potential ways in which governments and citizens improve matters."

What are your thoughts about the report's findings?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

What Is Intellectual Property and Why You Should Protect It

The value of many businesses may be found in its intellectual property (IP), which include patents, trademarks, copyrights and trade secrets. Protecting your IP by filing the necessary application with the U.S. Patent and Trademark Office (USPTO) is crucial to protecting your creativity, idea or brand. Understanding the USPTO's complex application system, however, can be overwhelming. Adam Philipp, Founder of AEON Law, an intellectual property law firm focused on patent, trademark, copyright, trade secret, and related IP matters, presented "VIPs: Very Important Patents" to the Seattle Entrepreneurship Club (SEC). His presentation brought clarity to defining intellectual property and how a business should protect its invention or brand.

Organized in 2008, the SEC is a nonprofit organization that offers a variety of services to help entrepreneurs, investors, and professionals succeed in Seattle and throughout North America. The Medina, Wash.-based organization also cooperates with organization in different industries and fields to promote the exchange of enterprises, talents, and culture between China and North America. While I recommend watching Mr. Philipp's presentation in its entirety via this link or in the embedded video at the end of this post, here a few takeaways entrepreneurs and investors may find of value on why and how they should protect their IP.

Mr. Philipp presented six reasons on why you should file for a patent:

1. Marketing: Good for public relations. "There is a stamp of legitimacy, particularly in the U.S., if a consumer hears that they are using patented technology";
2. Defense: Prove possessed of the invention. "Let's other companies know that you have been working on this technology at a provable point in time and it puts them on notice that they shouldn't threaten you if you were ahead of them";
3. Access: Leverage to others' IP. "A more sophisticated way of using intellectual property is patents are a special kind of tool that can be a force multiplier. So a small company with a strong patent can get the attention of a much larger company to get access to that larger company's IP. If the larger company is either threatened or wants access to the patented technology from the smaller company, the patent can be a lever that will move in otherwise much larger adversary or potential partner";
4. Monetization: License the patent for money. "You can use your patent like you would any other piece of property; it's like your car or house. You can give permission for other people to use it in exchange of something of value, usually money";
5. Offense: Sue for money or injunction. When your patent is infringed upon, "you can sue for money or damages, or you can sue for injunctions," which is "getting a court to tell somebody to stop doing something"; and
6. Value: Patents are assets. "Many companies value the use of patents as a barrier-of-entry tool that keeps competitors from getting into the same marketplace and boosts the value of the company that owns the patent. So patents are seen as company assets and can boost the valuations or the perceived value of the company."

Mr. Philipp talked about one additional reason on why you should file for a patent. The calendars of most investors, myself included, are full with meetings with entrepreneurs who are trying to raise capital for their business ventures. These entrepreneurs often request investors sign nondisclosure agreements (NDAs). But most investors will rarely sign one because doing so creates an undue burden on the time and cost of negotiating and monitoring the multitude of NDAs (a point that I address in my post, "There Is No Such Thing as a 'Standard NDA'"). Therefore, according to Mr. Philipp, an investee who has an interesting invention should obtain a patent before soliciting funds from an investor. "Revealing a trade secret without some form of confidentiality agreement (e.g., NDA) destroys the trade secret."

When I started my career in the early 1990s, it was common for the USPTO to take five or more years to examine a patent application. The long period of time often deterred companies from going through the patent application process. Today, through the USPTO's Prioritized Patent Examination Program (also known as Track One), Mr. Philipp encouragingly noted the examination process has been shortened to 4-10 months. "This has been dramatically changing how people think about IP protection, particularly patent protection with startup companies because once you have an enforceable tool that can keep people out of the marketplace, that can be a powerful tool with the right kind of investment."

Trademarks, Mr. Philipp explained, is a word, phrase, logo or other identifier (e.g., brands) of a source of goods or services. In the U.S., trademarks are used in commerce and they protect against other companies using a confusingly similar mark or similar goods or services. As for when a company should register its trademark, the time to consider trademark protection is when the company dedicates $5,000 or more in its marketing or brand enhancement strategy. "Why spend all that money only to find out someone has beat you to it beforehand?" asks Mr. Philipp.

While it is advisable to retain the services of a U.S.-licensed attorney to file the patent or trademark application with the USPTO, I encourage you to become familiar with the government agency's website to learn more about the patent application and maintenance process as well as the basics of trademarks.

What aspects of Mr. Philipp's presentation did you find of value? What has been your experience in protecting your company's IP?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

While a Slow, Painful Recovery to the Global Economy Is Predicted in 2021, the EIU Says Digitalization Will Present Opportunities for Certain Sectors

While I am always mindful of risks that can impact a company's operations, a pandemic is not often a risk most corporate leaders prepare for. The coronavirus pandemic's grip on the global economy was certainly not in consideration when I published a post about The Economist Intelligence Unit's (The EIU) Industries in 2020 report. One year later, The EIU's report entitled Industries in 2021: A Slow, Painful Recovery, which gives its outlook for six global industries: automotive, consumer goods and retail, energy, financial services, healthcare and pharmaceuticals, and telecommunications, says "[m]uch of what we predicted in last year's report turned out to be wrong. As we all know, the coronavirus (Covid-19) pandemic overturned assumptions about the development of the global economy and destroyed any hope of steady growth for many industries. This year more uncertainties and risks lie ahead as the world stutters into a recovery."

The report explains: "With their finances already weakened by the pandemic and resulting lockdowns, many companies will not be able to take advantage of a recovery that is likely to be fitful. The consumer goods and retail sector in particular is likely to see a wave of bankruptcies and store closures as more business goes online. The financial sector will also have to cope with a sharp rise in non-performing loans that, in some cases, may overwhelm the provisions that banks have put in place. Restructuring will reshape even those industries, such as telecoms, which have emerged from the pandemic relatively unscathed. However, there will be some winners from this process as markets consolidate around surviving companies and opportunities open up for new business models."

What is more, "With many industries lobbying for support, governments whose tax revenues are already depleted will have to focus support and incentives on sectors with the strongest growth prospects, or those that feed into long-term policy goals. These are likely to include protecting jobs, promoting investment (particularly in innovation) and tackling climate change."

Regarding the energy sector, The EIU maintains "policy will focus on increasing the use of renewable energy. Even Poland, previously a staunch defender of its coal sector, will begin a phase-out, while markets in South-East Asia will see particularly strong growth in renewables. In the automotive sector, generous incentives will continue to encourage purchases of electric vehicles, particularly in Europe, although countries such as France will start to trim back funding as the sector develops. China, meanwhile, will shift its focus towards hydrogen fuel cell vehicles, previously an area where Japan led the way."

On the topic of trade spats and international disputes, the report suggests: "As countries and companies try to rebuild, their focus is likely to turn inwards, with domestic markets and operations becoming a priority. However, as pressure to reshore production and secure supply chains increases, this will have implications at an international level, too."

For example, "In the telecoms sector, this has particular implications for Huawei, a Chinese telecoms company that is now being targeted by US export controls. The technology war will also affect other sectors, including automotive and consumer electronics, while in the financial services sector concerns over China's intentions could undermine Hong Kong's role as an international hub. The UK, meanwhile, will face its own international challenges, as Brexit finally takes full effect on January 1st, drastically changing the business environment for financial firms, automakers and many others."

"Digitalization," according to The EIU, "will affect nearly every industry sector. In the consumer goods and retail sector (and even the automotive sector) the growth of online shopping will generate new companies and new jobs, making up for some of the cuts seen in real-world retailing. However, online retailers will not have it all their own way, with cash-strapped governments keen to raise digital taxes that are likely to exacerbate international tensions."

Moreover, "The rise in online shopping and other activity will also fuel the growth of new financial services, starting with digital payments and progressing into digital currencies, including national ones in China and elsewhere. Even healthcare providers, spurred by the pandemic and social distancing measures, are expanding their online services, with new regulations widening access to telehealth—while at the same time reining back its use where it could affect patient care."

The EIU's "key global forecasts for the six industries covered by this report are:

• "Asia will be the first region to rebound to 2019 levels in most industries, given its relatively shallow slump in 2020;
• "Latin America and Africa will see the slowest recovery, held back by low commodity prices and high debt levels;
• "new-car sales will recover to grow by 15% globally, while commercial vehicle sales will rise by 16%, but only China, Ukraine and Turkey will see sales return to their 2019 levels;
• "global retail sales volumes will grow by 3% but still fall 2% short of 2019 levels;
• "energy consumption will rebound partially—by 2.6% worldwide—but demand for oil and coal will remain lower than in 2019 as the use of renewables surges ahead;
• "financial firms will face weak demand for their services amid mounting debt defaults, while their income will be hurt by low interest rates;
• "healthcare expenditure, which dipped in 2020 despite spending on the pandemic, will surpass 2019 levels, rising by 7% worldwide in US dollar terms; and
• "global mobile subscriptions, which also dipped in 2020, will increase by 3%, again surpassing 2019 levels."

The EIU held a webinar, which is available through this link or the video embedded below, features industry analysts who comment on specific aspects of the report. While I recommend watching the session in its entirety, one point worth mentioning is the presentation of how the six industries covered by the report will be impacted by four key trends:

Job loses and bankruptcies will mount

• Automotive
• Consumer goods and retail

Some governments will aim to support a green recovery

• Automotive
• Energy

Trade spats and international disputes will remain disruptive

• Financial services
• Telecoms

Digitalization will offer the biggest opportunities

• Consumer goods and retail
• Financial services
• Healthcare and pharmaceuticals
• Telecoms

"As these decidedly mixed forecasts demonstrate," the report notes "there will be nothing straightforward about the global economic and business recovery in 2021. Even if the coronavirus is brought under control, many companies will face challenges that they will not be able to meet. Nevertheless, there will also be opportunities on offer for companies that are nimble enough to take advantage of rapid changes in the economic, business and political environment."

What are your predictions for 2021?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.