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.

How Technology Can Drive the Transition to a Superior Future

According to a report produced by Force for Good, a project of the F4G Foundation, a non-profit limited liability company incorporated under the laws of England and Wales, "technology can provide the means to create a sustainable, secure, and superior world. It can help us finish the job of liberating the remaining populations across the world, providing inclusion for all in finance, education, healthcare, housing, dignified work, and a technology enabled world."

The report, entitled Technology Driving the Transition to a Superior Future, includes a letter authored by Ketan Patel, chair of Force for Good's advisory council. Mr. Patel points out that the 2023 "report identified 19 technologies that the largest 100 tech companies were pursuing in a bid to lead the world into a new era. We found that these companies had universally embraced ESG, were actively making their operations across the globe sustainable, and the leaders among them were making a positive impact on society at large." Mr. Patel also notes the "19 technologies identified continue to underpin the efforts of the largest and most resourceful companies. Importantly, what is clear is that a small sub-set of these technologies are the most powerful arbiters of the future, and these are AI, quantum computing, nanotech, genetics, and fusion." 

The 19 technologies include artificial intelligence, big data analytics, quantum computing, internet of things (IoT), robotics, drones, autonomous vehicles, smart grid, renewables, energy storage, next generation nuclear (fusion), eMobility, virtualization (VR, ER, AR, XR, MR), blockchain, material science, 3D printing, nanotechnology, and space technology.

Below are the report's key messages:

• Existing technologies enabled by AI can close nearly 50% of the SDG gap, if scaled and deployed globally, and can help position the world for the transition to the Information Age; this can bridge the otherwise unsurmountable capital of US$175 trillion needed for the SDGs, and a shortfall of US$137 trillion.
• The tech industry is the critical player required to take the lead given its expertise, products, influence and ability to access capital, rolling out technology at scale across the world and driving the world into the next era; three of the ten initiatives identified - universal connectivity, leveraging generative AI across the SDGs, and mass financial inclusion - together contribute to nearly 30% of the SDGs and lay the foundations for levelling up the world.
• 19 core technologies have been identified as the focus of the top 100 tech companies in competing for the future and are also the focus of geopolitical competition between countries and power blocs, and their control is increasingly seen as a key strategic asset for nation states.
• While the US has the clear lead from a macro and technology perspective, China has drawn level with the EU on key macro fronts and built a strong position in many of the core technologies, the EU has the biggest market which positions it as a rule setter for others, and India is now rising to take a position among these power blocs; US internal political divisions and politicization of the transition among other issues represent noteworthy risks to its leadership position and ability to lead the world into the next era.
• The risks of a dangerous transition including global climate, migration and socio-political-economic disasters are heightened unless the two-thirds of the world that were not material beneficiaries of the Industrial Age, predominantly in the Global South and also left behind in advanced nations are included; a post transition world, built on a more inclusive platform, can be powered by the identified core technologies, and a suite of others currently under development including fusion, gene-editing and nano-tech, creating a more secure, sustainable and superior future.

The report also presents AI's impact on each SDG:

SDG #1: No Poverty

• Predictive analytics to identify regions at risk of poverty.
• AI-driven agricultural technologies to increase crop yields for small farmers.
• Automating and improving the efficiency of aid distribution.

SDG #2: Zero Hunger

• Precision agriculture for optimizing food production and reducing waste.
• AI in supply chain management to reduce food spoilage.
• Development of AI-based nutritional planning tools.

SDG #3: Good Health and Well-Being

• AI in diagnostics to improve disease detection and treatment.
• Personalized medicine for tailored healthcare solutions.
• AI-driven research in drug discovery and epidemic tracking.

SDG #4: Quality Education

• Adaptive learning platforms for personalized education.
• AI tools for language translation to overcome education barriers.
• Analyzing educational data to improve teaching methods.

SDG #5: Gender Equality

• AI algorithms to identify and reduce gender biases in hiring.
• AI-driven platforms to support women entrepreneurs.
• Analyzing data to better understand and address gender disparities.

SDG #6: Clean Water and Sanitation

• AI for monitoring and predicting water quality issues.
• Optimization of water distribution systems in urban areas.
• AI in wastewater treatment processes for better efficiency.

SDG #7: Affordable and Clean Energy

• AI in optimizing renewable energy sources.
• Predictive maintenance for energy infrastructure.
• Enhancing energy efficiency in buildings and industries.

SDG #8: Decent Work and Economic Growth

• AI-driven job market analytics for skill development.
• Automation to increase productivity and create new job opportunities.
• AI tools for small businesses to access markets and finance.

SDG #9: Industry, Innovation and Infrastructure

• AI in predictive maintenance for industrial machinery.
• Facilitating research and development through AI-driven insights.
• Enhancing logistics and supply chain efficiencies.

SDG #10: Reduced Inequalities

• AI in financial services to provide credit access to the underserved.
• AI-driven educational tools for marginalized communities.
• Enhancing accessibility technologies for people with disabilities.

SDG #11: Sustainable Cities and Communities

• AI in urban planning for sustainable and efficient cities.
• AI-driven traffic management and public transport optimization.
• Enhancing public safety through smart surveillance systems.

SDG #12: Responsible Consumption and Production

• AI in supply chains to promote ethical sourcing and reduce waste.
• AI tools for lifecycle assessment of products.
• Automation in recycling processes.

SDG #13: Climate Action

• AI in climate modeling and forecasting.
• AI-driven solutions for carbon footprint reduction.
• Enhancing the efficiency of climate change mitigation strategies.

SDG #14: Life Below Water

• AI for monitoring and protecting ocean biodiversity.
• Predictive analytics for sustainable fishing practices.
• AI in studying and mitigating the effects of ocean acidification.

SDG #15: Life On Land

• AI in wildlife tracking and habitat protection.
• Predictive tools for forest fire prevention.
• AI-driven land-use planning for sustainable development.

SDG #16: Peace, Justice and Strong Institutions

• AI in crime prediction and prevention.
• Enhancing legal research and access to justice through AI tools.
• AI-driven systems for monitoring and preventing corruption.

SDG #17: Partnerships For the Goals

• AI to analyze and optimize international aid.
• Facilitating cross-border collaboration through AI-driven platforms.
• Enhancing global data sharing and analysis for informed decision-making.

In its conclusion, the report asserts that "Technology is the catalyst for a civilizational shift in the world. As such, competition for technology leadership has become a matter of national security. However, in the absence of raising the Global South, the continued progress of the rich nations of the Global North is at risk." Moreover, "The SDGs can be solved with existing solutions and deliver a more equitable platform from which technology can build a far superior future. In the transition to a new civilization built on information and a new generation of technologies, the world is about to enter a whole new era that has the potential to deliver peace, prosperity, and freedom to all. The tech industry has a critical role to play in building this superior future."

What are you recommendations on how technology can drive to a superior future?

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.

Representatives From Nigeria's and Ghana's Financial Sector Learn About U.S. Cybersecurity Solutions

Sponsored by the U.S. Trade and Development Agency (USTDA), which helps companies create U.S. jobs through the export of U.S. goods and services for priority infrastructure projects in emerging economies, I attended the "Nigeria and Ghana Financial Sector Cybersecurity Solutions Networking Lunch" in San Francisco, Calif. on February 13th, 2024. This event, which was part of USTDA's Nigeria and Ghana Financial Sector Cybersecurity RTM (reverse trade mission), provided an opportunity for U.S. companies to hear firsthand from the delegation of Nigerian and Ghanaian business leaders about upcoming business opportunities and to meet one-on-one with delegates to present their cybersecurity services and solutions.

The delegation was interested in procuring products, technologies, and services from American businesses in the following areas: cyber resilience and risk management systems, electronic payments and digital processing, threat intelligence and fraud prevention, and network monitoring and data protection. I had engaging discussions with the delegates about the state of financial services sector in west Africa, the growing threat of cybersecurity, and efforts being made to train the local population to tackle the challenges and seize the opportunity to digitalize Africa's economy.

As an observer of the digitalization of the African continent, this event carried significant importance in light of the Digital Transformation with Africa (DTA) initiative, which President Joe Biden launched to expand digital access in Africa and increase commercial engagement between U.S. and African companies, support increased digital literacy, and strengthen digital enabling environments across Africa. The DTA channels the collective efforts of U.S. and allied government and private sector partners to advance these aims across three pillars including digital economy and infrastructure, human capital development, and digital enabling environment.

The DTA is part of USTDA's Access Africa initiative which supports quality information and communications technology (ICT) infrastructure across Africa. By working with the public and private sectors across the continent, Access Africa brings together critical stakeholders and designs targeted programming to advance inclusive, secure and sustainable connectivity. In addition, Access Africa partners individually contribute to the identification and implementation of USTDA activities that support Africa's ICT sector, including technical, regulatory, institutional and procurement assistance. Lastly, Access Africa provides lasting framework for Africa's public and private sector to partner with trusted U.S. providers and establish ICT relationships that are built to last.

According to the USTDA, as a leading developer and deployer of cybersecurity and data protection solutions, the U.S. private sector is well-positioned to become an essential partner in fortifying network infrastructure in emerging economies' financial sectors. U.S. firms are at the forefront of network monitoring, data analytics, vulnerability detection, artificial intelligence, and blockchain applications. Across Africa, the banking sector has been heavily targeted by cybercrime, with losses of $248 million to malicious cyber activity in 2021.

I appreciate how USTDA's Nigeria and Ghana Financial Sector Cybersecurity RTM allowed public and private sector decision-makers the opportunity to meet with U.S. entities engaged in developing and deploying cybersecurity solutions in the financial sector; establishing policies and regulations; and implementing best practices. The delegates learned about innovative U.S. technologies, financing mechanisms, and best practices to combat cybercrime in the banking sector.

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.

Policy Recommendations for Promoting International Investment by Small and Medium-Sized Enterprises

A report by the United Nations Conference on Trade and Development (UNCTAD), the trade and development body of the United Nations, correctly notes that "Small and medium-size enterprises (SMEs) are important contributors to economic development, representing a substantial portion of businesses globally. Global markets offer SMEs opportunities for growth, diversification and resilience. Access to international markets enables them to tap into new customer bases, gain exposure to diverse business practices and foster innovation through cross-cultural collaboration."

Having supported initiatives aimed to promote international investment by SME's, I support the report's assertion that "SMEs encounter significant challenges that hinder their investment overseas. SME investors, relative to large Multinational Enterprises (MNEs), face distinctive bottlenecks including financial and information constraints, difficulties in dealing with regulatory complexities and, importantly, an international investment environment in which facilitation and investment promotion institutions are often geared towards attracting large-scale investment projects." The report points out "Foreign direct investment (FDI) by SMEs has been in decline in recent years: the number of outward greenfield investment projects in 2022 was only about a quarter of that in 2015."

With financial support of the Kingdom of the Netherlands, UNCTAD's report says that "Based on original empirical studies in different developing regions and selected developed economies, this report discusses how to reduce the common investment policy bias in home and host countries towards large MNEs, the role of SMEs in South–South and intraregional FDI, and ways and means to maximize the development impact of SME FDI." What is more, "It introduces a new framework to assess the relevance and effectiveness of existing investment policies for the promotion of SME investment and presents policy options to facilitate overseas investment by SMEs and reduce the existing policy bias." These policy options include:

• Adjusting investment promotion and facilitation services towards addressing the needs and challenges that SMEs face, so that size does not hinder their access to financial incentives and facilitation mechanisms.
• Establishing comprehensive support networks and designing accessible matchmaking program and events to help small businesses connect and to foster sustained and successful partnerships.
• Improving SMEs' competitiveness by supporting their innovation capacity, including through digitalization, technology adoption and capacity-building.
• Facilitating SMEs' access to capital, including by improving digital services and infrastructure development.
• Simplifying the regulatory and administrative framework and improving access to information by using digital platforms.
• Promoting SMEs' participation in trade to increase their international exposure and knowledge of foreign markets.

I agree with the UNCTAD that "By implementing a combination of these policies, governments can create an environment that supports SMEs in their efforts to invest and thrive in international markets and to harness the related development benefits."

What are your recommendation for promoting international investment by small and medium-sized enterprises?

​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.

AI Led the Global Conversation at CES 2024

Me, my mom, Lindy Rose, and my
colleague, Patricia Berdejo, attending
CES on Jan. 12, 2024

"AI, AI, AI," was the prominent theme at CES® 2024, which saw over 4,300 exhibitors including a record 1,400+ startups from around the globe in Eureka Park®. As in previous years, this year's CES, which took place from Jan. 9-12, 2024, showcased the innovative trends shaping tomorrow and solving the world's most pressing challenges. This post focuses on a few of observations of attending this year's event in Las Vegas, Nev.

As noted in a press release issued by the Consumer Technology Association (CTA), the organization that produces CES, artificial intelligence "led the global conversation at CES 2024. Companies highlighted the enormous potential of AI to improve our world with cutting-edge applications that will transform how we communicate, do business and take care of one another." Several AI-focused panel sessions took place during the four day event including on that explored the relationship between ethics and AI in academia, AI's impact on the creative process and content businesses, and how generative AI is leading the transformation of hardware and chips.

CTA's announcement also notes that "CES established access to technology as the eighth pillar of the Human Security for All (HS4A) global campaign, which focuses on the critical role technology plays to improve every aspect of the human experience." Tech is a catalyst for tomorrow, powering solutions to pressing global challenges." Attendees saw the release of a new report released Force for Good on tech's influence on human securities. "Aligned with CTA's CES 2024 Tech Trends to Watch, the report proved that universal connectivity and leveraging AI across human securities will improve our world," the Arlington, Va.-based organization said.

More companies are showing their commitment to sustainable solutions "through technologies, products, and services to reduce emissions and waste by streamlining electrification, developing renewable energy sources, and experimenting with new technologies such as battery recycling." As for Accessibility & Innovation for All, the CTA points out that "CES 2024 fostered a platform centered on universal design for the diverse tech industry to come together and converse on the next wave of innovation. CES featured sessions on diversity in the tech industry, a wave of new technologies that will improve lives and advances in accessible gaming. CTA also announced a new investment partnership in TFX Capital, which supports veteran entrepreneurs in tech."

As for digital health, the CTA explains that "Tools and technologies aimed at lowering costs, improving health equity and saving lives were highlighted. Innovations included digital therapeutics, mental wellness, sleep tech, women's health tech and telemedicine. At the CES Digital Health Summit, Mark Cuban and his Cost Plus Drug Company broke news about a new partnership, while capacity crowds joined the Digital Health mixer and programming with officials from the FDA and across the health policy space."

In what continues to be one of my favorite components of CES, Eureka Park grew this year with over 1,400 exhibiting startups including country and territory pavilions representing France, Hong Kong, Italy, Israel, Japan, Korea, the Netherlands, Taiwan, and Ukraine. As highlighted in the previous post on this forum, I attended an event that preceded CES that featured several European startups. During CES, I had the opportunity to getting better acquainted with the founders at the exhibit booths in Eureka Park.

Among the other exhibitors from around the globe, I was impressed with Brickify, a Nigerian startup that is turning recycled plastic waste into water-, fire-, and heat-resistant paving bricks used to construct roads and low cost homes. Ghostpass is a company based in Korea that created a decentralized remote biometric authentication solution that monitors and controls large amounts of biometric information by storing it individually on users' smart devices rather than storing it in bulk in the cloud.

Midbar, which is another firm based in Korea, created an inflatable farm that enables food production anytime, anywhere. Without heavy and costly steel frames, the AirFarm is designed to be lightweight but sturdy. The AirFarm converts moisture from the air into water in real-time. It recirculates the moisture produced by crops back to the roots, making it the world's first farm that operates without water infrastructure.

Lastly, as mentioned by the CTA, while we are experiencing "a moment of global uncertainty and rapid technology advancement, government leaders shared an optimistic view of regulation to empower tech innovation, including in AI." At the Innovation Policy Summit, over "160 international, federal, state and local government officials and staff participated in the Leaders in Technology Program, which convened top innovators and policymakers to discuss the future of pressing tech policy issues, including privacy, health innovation, trade policy, competition, artificial intelligence and self-driving vehicles."

If you attended CES 2024, what were your key moments and takeaways?​

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.

Helping Policymakers and Stakeholders Understand Risk and Design Effective Policies for Urban Resilience

According to a report developed by Economist Impact and supported by the Tokio Marine Group, "The world is facing unprecedented challenges. Extreme weather events, from hurricanes and wildfires to flooding and heatwaves, are becoming more frequent and their effects more devastating." Furthermore, "Emerging risks like cyber-attacks loom larger as technology dependence deepens. Our cities are exposed to all of these risks and more. Lives and livelihoods depend on our ability to understand and mitigate the evolving threats to our urban centers."

The Resilient Cities Index highlights three phases to resilience. "Preparation and mitigation come first. Understanding the risks, how they are evolving and taking steps to minimize their impact is essential if cities are to avoid the worst. The second phase is response, necessitating swift reactions and timely assistance to save lives and diminish the impact when disasters occur. Last is recovery, emphasizing the need to learn from tragedies and rebuild stronger, better-equipped communities for future shocks and stresses."

Aiming to help policymakers and stakeholders understand risk and design effective policies for urban resilience, Economist Impact developed a benchmark of 25 cities. To gauge the resilience of these cities, the report's authors took measurements across four pillars: critical infrastructure, environment, socio-institutional and economic. This white paper combines index analysis with expert commentary to identify patterns, common strengths, deficits and best practices across index cities.

Key findings from the inaugural edition of the Resilient Cities Index include:

• Cities performed well in the critical infrastructure pillar of the index, but there are some weak points that require strategic focus. The cities with the highest scores were Dubai, Shanghai, New York and Singapore. These capital-rich market locations have greater opportunities to develop new infrastructure, compared with European cities constrained by decades- or centuries-old systems. Within this pillar, digital infrastructure and transportation were a drag on cities' resilience.
• Cities that use data and technology to create operational efficiencies and share information with their citizens—i.e., smart cities—are better at dealing with shocks. Patchy internet quality, which can impede access to digital services, pulled down the overall resilience score in the critical infrastructure pillar. Digital technologies and advanced data analytics can help to predict risks, optimize existing systems and keep the public informed. Greater digitalization comes with risks, especially to critical infrastructure, but most cities in the index have built safeguards against this.
• Most emerging economy cities lack adequate regulatory frameworks, strategies and incentives for futureproofing infrastructure. Only a few cities in the index achieved high scores for future-proofing, which involves ensuring infrastructure preparedness for shocks while managing current and future emissions. One way cities can future-proof is by incentivizing sustainable designs for buildings, such as installing green roofs, incorporating modularity and retrofitting for energy efficiency—a practice only found in high-income cities in the index.
• Efforts to achieve environmental resilience are led by innovative solutions. Cities are employing a variety of nature-based solutions to adapt to flooding and heat stress, from planting rooftop vegetation and mangrove forests (green infrastructure) to rehabilitating wetlands (blue infrastructure). Cities are also decarbonizing by adopting renewable energy and negative emission technologies, such as carbon capture, storage and removal. However, the scalability of these technologies is likely to be challenging for resource-constrained emerging market cities.
• Cities demonstrated poorer performance in the socio-institutional pillar, mostly due to income inequality and poor health and well-being metrics. Only nine cities have a single, comprehensive plan to support vulnerable groups. However, one bright spot is that cities are promoting a culture of readiness to act in the event of a disaster. The majority of cities scored highly on this or are working to improve their readiness.
• Cities had the lowest average scores in the economic pillar, dragging down some cities that performed well in other areas. The low penetration of financial safety nets hinders safeguards against threats and undermines a city's ability to recover from shocks. Another aspect of economic resilience is a city’s ability to incubate innovation, which can foster solutions to a range of problems, from congestion to water stress. Unfortunately, most cities scored poorly on the indicator for start-up ecosystems.

The report's conclusion points out that "A resilient city is not only prepared for shocks but has the ability to bounce back and thrive. Recognizing both existing and looming threats will help cities better understand their vulnerabilities and design targeted actions. However, building such cities requires stakeholders from government, businesses and communities, as well as individual city-dwellers, to engage in holistic resilience thinking at community and municipality levels."

Moreover, "While resilience needs to be tackled in myriad ways, a number of critical strategies have been identified in the course of this research and are summarized below."

• Empower the community to be active participants. This is contingent on the democratization of information. All city-dwellers should have equal access to government information, including what to do in an emergency. Some cities, like Singapore, do this very well, using digital channels to disseminate information to everyone simultaneously. Fostering a culture of readiness and the ability to manage hazards will require investment to train and educate people at governing and grassroots levels to be stewards of their city. Recognizing that information is key, municipalities could consider partnering with a digital platform to minimize misinformation and ensure the city moves in one direction, despite disruption.
• Social cohesion efforts need greater advancement across the board. Cities are nothing without the people who inhabit them. Greater attention to social cohesion will help to ensure cities are less fragmented, adaptive and better prepared for shocks. City governments should overlay resilience efforts with initiatives that aim to improve the lives of urban residents. This process should be driven by city leadership and engage civil society. The majority of cities in the index have some way to go to strengthen social cohesion through integration programs for society's most vulnerable.
• Early warning systems (EWS) are vital for safe cities but investment is needed to hit the 2027 target. National governments and municipality leaders will have to collaborate to ensure universal early warning systems coverage by 2027. There are two challenges that need to be met. First, capital is needed to bridge the investment gap for technologies with a greater push for the development and adoption of frontier and horizon tech–from drones to AI. Second, governments need to facilitate the necessary legislation to connect these EWS to emergency and response plans to ensure there are protocols and resources in place to deal with climate extremes and hazards. Community acceptance and responsiveness to early warnings are essential in the effectiveness of EWS. This can be achieved through systematic training and education and awareness programs.

What do you think of the report's findings and conclusions? Do you have additional recommendations on how policymakers and stakeholders understand risk and design effective policies for urban resilience?

​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.

Digitally Enabled Climate Finance Can Help LMICs Reduce Emissions and Adapt to the Impacts of Climate Change

Having engaged in the climate finance and technology sectors over the past several years, I agree with the GSMA that "Climate finance has increasingly taken center stage in debates about the future of climate action. For low- and middle-income countries (LMICs) to reduce emissions, significant financial support is needed to transition to low-carbon economies and adapt to the impacts of climate change." The UK-based organization notes in a new report that provides an overview of how mobile and digital technology can be used to facilitate and accelerate climate finance, "While disruptive technologies offer great promise, they require an enabling ecosystem and robust financing to be successful."

The report's Executive Summary importantly points out: "The use of mobile and digital technologies in delivering climate finance to underserved communities shows excellent promise. Emerging solutions moving climate finance forward include frontier technologies, such as the Internet of Things (IoT) and blockchain, as well as the voluntary carbon market (VCM).

The report's other main conclusions include:

Defining climate finance: "The research highlighted that the public and private sectors define climate finance differently. This has an impact on the level, quality and priority of investment in climate change. Understanding the various definitions of climate finance is also key to creating an inclusive ecosystem in which all actors can execute their mandates, including the mobile and digital technology community. The knowledge and technical expertise required for climate finance can be enhanced based on agreed definitions, and will help to develop tailored products, services and capacity building tools."

Building knowledge and technical expertise in digitally enabled climate finance: "Climate finance is a new, complex and contested field. Digitally enabled climate finance has added a layer of complexity because it incorporates technology in both climate action and climate financing. As a result, there is a gap in knowledge and technical expertise, which are key to developing solutions and accelerating climate finance for those most impacted by climate change."

Developing digital infrastructure and ecosystems in LMICs: "The deployment and delivery of climate finance via mobile and digital technologies depends on strong digital infrastructure. However, there are numerous barriers to the development of this infrastructure."

Improving access to quality data: "Digital technology needs to be integrated in climate finance to ensure quality data. However, in LMICs, there are data-related barriers that make it difficult to attract investment and compete for access to climate financing."

Reaching underserved populations: "Underserved groups in LMICs, especially women, are the least likely to access and use mobile technology. This is due to a variety of reasons, including the affordability of handsets and data, a lack of digital skills and social norms. Since these groups tend to be the most vulnerable to the impacts of climate change, solutions need to be tailored specifically to their needs and access to technology."

The development of carbon markets: "[T]he adoption of Article 6 and Article 6.4 of the Paris Agreement, which outline the development of a VCM, has sparked interest in this innovative climate financing mechanism. However, there are persistent implementation challenges, largely due to complex and immature markets."

I appreciate how the report showcases models and best practices for how mobile and digital technologies can ensure vital funds reach the most vulnerable people and communities. In doing so, it demonstrates the opportunities for transformative technologies to help counter the climate crisis. While climate finance is relatively new, research presented in the report "shows that mobile and digital technology are uniquely positioned to provide tools that catalyze and strengthen how it is delivered." The report also "offers a preliminary assessment of digitally enabled climate finance to guide public and private sector actors, including financial institutions and mobile network operators (MNOs). In doing so, it seeks to support the delivery of innovative solutions and partnerships that serve communities most affected by climate change."

The GSMA also produced a webinar that discussed the future of climate action and the role of mobile and digital technology in delivering climate finance in LMICs.

If finance is at the heart of tackling the climate change crisis, then what are your recommendations of how to use mobile and digital technologies to ensure vital funds reach the most vulnerable people and communities?

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.

Korean Companies Demonstrate Their Innovative Tech Solutions at TechCrunch Disrupt 2022

TechCrunch Disrupt resumed its in-person event in San Francisco from Oct. 18th-20th, 2022. The conference's purpose is to bring together the global startup community to discover insights, collaborate, and celebrate achievements that have defined each founder's journey and for those yet to come in the future. At the invitation of the Korea Trade-Investment Promotion Agency (KOTRA), a state-funded trade and investment promotion agency operated by the South Korean government, I had the opportunity to visit the conference's Korea Pavilion and meet with startup founders and their colleagues. Among the 20 great companies that demonstrated their innovative products and services at the pavilion, which was co-hosted by the Korea International Trade Research Institute (KITRI), there are a few are worth mentioning based on my professional and personal interests (the program book containing a description of all 20 companies may be viewed here).

Cochl created an artificial intelligence (AI) platform specializing in ambient sound recognition. Use cases include public safety (faster response to shooting incidents, vandalism detection for buildings, and violence prevention by scream/yell monitoring), traffic monitoring (automatic car accident report and illegal car honking noise monitoring), and autonomous driving (ambulance and police car siren detection for giving right-of-way action and car window break monitoring). Another valuable use case is in the defense sector by using smart glasses with gunshot analysis, submarine and torpedo type analysis, and surrounding environment monitoring with unmanned ground vehicles.

Dabeeo provides global geospatial information based on AI/ML (machine learning) technology by reading and interpreting the earth to help customers build or modify digital maps. Its STUDIO for maps is a SaaS platform that makes creating, editing, and managing map data convenient and intuitive to use. This website provides several examples of how retailers, showrooms, factories, stadiums, and exhibition centers are using the cloud-based platform.

TheWaveTalk developed a technology that uses laser multi-scattering and deep learning to measure foreign substances in water with great precision. Through the technology, they developed a home water quality meter called the WaTalk, which scatters light inside the water using a laser and analyzes small signals of fine particles such as bacteria, virus, organic pollutants, and microplastics to determine the degree of contamination. The company says its product is 20-50 times cheaper than professional measuring equipment.

Image: Willog

Willog is simplifying the complex cold chain industry. (A cold chain is a low temperature-controlled supply chain network.) The company's patent-based monitoring device collects various data during the entire logistics process, and displays it on a QR code. Willog's data monitoring device, the One Time QR (OTQ), which can be placed on vehicles, shipping containers or pallets, allows instant confirmation of temperature records by scanning the QR code with a smartphone camera and does not require other training or equipment. Effective field operation response is possible without extra time or procedures spent between the driver and the personnel to check the temperature. Where the device cannot be physically retrieved, Willog's OTQ-N uses near-field communication (NFC) to facilitate logistics monitoring within a flexible environment.

While KOTRA provides a useful service in the promotion of trade and investment with 128 Korea Business Centers located in 84 countries, the agency also facilitates global people-to-people exchange and technological exchange. I appreciate having the opportunity to meet with ambitious startup leaders who are building companies that improve the way we live, work, and play.

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 Evaluates Gaps in Early Warning Systems for Climate-Related Hazards in the US

"As climate-related weather events become a greater risk across the globe and in the United States," a report produced by the GSM Association (GSMA) explains that "innovative and inclusive early warning systems (EWS) are critical to mitigate these risks and strengthen preparedness for climate disasters." Moreover, "The frequency and impact of climate-related events have escalated in the US in recent years, negatively impacting communities and resulting in loss of life, property and livelihoods."

Funded by the UK's Foreign, Commonwealth and Development Office, GSMA's report evaluates the gaps in EWS for climate-related hazards in the US, and identifies examples of mobile and digital interventions used at the community level in low- and middle-income countries (LMICs) that could help underserved and vulnerable groups become more resilient to climate-related disasters. The report also provides specific recommendations for closing identified gaps to strengthen EWS in the US.

The report's key findings include:

• Climate-related hazards are on the rise in the US
• Socially vulnerable groups are the most affected by climate-related risks and disasters
• Early warning systems at the community level are not as robust as national systems
• There are opportunities to improve how emergency warnings are issued and disseminated
• Innovative community-based EWS in low- and middle-income countries offer lessons for the US

The GSMA proposes the following recommendations to help develop inclusive climate resilience strategies:

Co-design EWS with communities to strengthen communication, dissemination and response capability. "The current approach in the US aims to do this, but is often poorly implemented. Bringing American community organizations and municipalities together to develop new and/or modified EWS delivery models for Integrated Public Alert and Warning System (IPAWS) message initiation, or transfer to another system, will help develop localized models and strengthen community trust."

Investigate opportunities to leverage multi-channel EWS communication to reach a wider group of users and improve users' responses to messages. "In the US, message recipients are more likely to act if they receive a warning multiple times from different platforms. Message solutions like CHANTER could be used in combination with existing systems to amplify messages and make them more relevant, resulting in more specific messages being delivered to recipients' phones. When local communities are stakeholders and involved in managing such solutions, messages sent through the community-based channel would most likely be considered trustworthy and, therefore, prioritized."

Strengthen multi-language EWS messaging. "Leverage low-cost systems to rebroadcast messages in multiple languages. Local governments may also use other systems to auto-translate messaging for minority languages in coordination with user representatives from these communities. There is also an opportunity to pilot AI-powered auto-translate systems, for example, talking books to reach users who are not literate."

Engage partners in educating customers about wireless emergency alert (WEA) and local opt-in alert and warning systems. "Local communities can partner with local wireless operators to provide information to consumers on the benefits of WEA and local opt-in systems. This could be implemented as a corporate social responsibility initiative, alongside civil society groups and county emergency offices, hosting targeted workshops and advocacy campaigns that highlight the importance of residents signing up for warning messages and gathering feedback from residents on their preferences and potential challenges related to receiving disaster warnings."

According to the National Oceanic and Atmospheric Administration's National Centers for Environmental Information, there were 142 weather- and climate-related disasters costing at least $1 billion each have been recorded in the US in the past 10 years. The most common and costly events were hurricanes, cyclones, and wildfires. The estimated cumulative cost of these events between 2012 and 2022 was more than $1 trillion.

The GSMA importantly notes that "Planning for climate change requires that government institutions and local communities adapt and prepare systems and strategies to mitigate the risks of climate-related disasters and build their resilience and capacity to respond." This report presents some valuable insights into how to create innovative and inclusive climate resilience strategies by closing gaps to strengthen early warning systems in the US.

Do you agree with the report's recommendations?

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.

Big Tech to Remain Resilient Despite Macroeconomic Headwinds

In a report published by the Economist Intelligence Unit (EIU), "The macroeconomic environment is worsening" and the "EIU expects global economic growth to slow to 2.8% in 2022, while inflation reaches 9.2%— and big tech companies are not immune to the downturn." The report adds that Alphabet, Amazon, Apple, Meta, and Microsoft, in the quarter ended June 2022, "have reported their softest results in over a year."

According to the EIU, "The slowdown suggests that the strong growth seen as a result of the pandemic is now normalizing. Although big tech companies retain strong assets, such as their market positions, sizes and cash reserves, they will have to cope with weaker demand and higher costs over the next few years."

American enterprises with global operations that conduct commercial transactions in US dollars may be seeing a decline in sales outside of their home market as a result of a strong dollar. The EIU, however, explains that "With the exception of Meta, revenue growth is slowing, not declining, showing that big tech can still find pockets of growth despite the gloomy macroeconomic environment."

Furthermore, "Among the factors hurting big tech in 2022, the strong dollar is the most prominent one: these companies make between 40% (Amazon) and 60% (Apple) of their revenues outside the US. The impact of exchange rates was between 3-4% in the second quarter of 2022, but could reach as much as 6% in the third. We forecast that the euro will start to regain some ground in 2023, but the yen, sterling and some other currencies will remain weak."

In addition to macroeconomic conditions, especially the strong US dollar, are weighing on big tech earnings, the report's key findings include:

• Meta was the worst affected, reporting its first-ever quarterly revenue decline (-1%).
• The enterprise side remains strong, with cloud services growing at over 30%; premium services and subscriptions also remain positive on the consumer side.
• Big tech companies retain huge cash reserves (over half a trillion dollars combined), which will enable them to weather the storm
  

The EIU encouragingly notes that selling cloud services to enterprises "remain robust for big tech." The UK-based organization further says "High growth in cloud revenue suggests that businesses are sticking with their digital transformation plans despite tougher macroeconomic conditions. They view these investments as important for driving revenue and saving costs in the long term."

The report, however, points out that "The consumer environment was more difficult. As well as weaker consumer demand hitting the advertising market, online retail growth has also slowed (after surging during the pandemic years)."

On the topic of large cash reserves keeping big tech ahead, the EIU predicts that "The five companies will slow down hiring this year and next as they look to contain costs, but this follows a period of heavy hiring—Meta grew its headcount by 32% in the past year." Moreover, "Slower hiring does not suggest a lack of investment or innovation: big tech companies are increasingly competing with each other, and many other players, across a number of markets, such as healthcare, gaming or extended reality, and will continue to do so. Nevertheless, the environment is getting tougher, not only in terms of macroeconomic conditions and the competitive landscape, but also in terms of regulation."

The EIU adds that while it remains "skeptical that the US will pass any major tech laws before the November 2022 midterm elections, the EU has recently passed the Digital Markets and Digital Services Acts. Both will impact big tech companies if properly enforced." As reflected in the image to the right, the tech firms "can still use their size as well as their large cash reserves, which combine to over US$500bn for the five companies, to cope with tougher conditions."

I appreciate how this technology outlook analyzes the recent slowdown, outlines some of the critical challenges facing big tech and why, despite tricky external conditions, EIU expects these companies to remain resilient. What do you think of the report's findings? How are you making your company resilient to macroeconomic headwinds?

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.