WASHINGTON, Sept. 22, 2021 /PRNewswire/ -- Business leaders have encountered their fair share of challenges since the onset of the COVID-19 pandemic. Now, more than 18 months into the crisis and still facing countless uncertainties, it is more important than ever that businesses widen their apertures beyond conventional wisdom, identify plausible and powerful contingencies, and plan and prepare for the unexpected. It is for this reason that Kearney's Global Business Policy Council has launched a new flagship report, "What If?"
This year's report, entitled "Walking the tightrope," throws the spotlight on five crucial "what if" questions that business leaders should be considering as they plan for the future. The first question explores what might happen if the world fails to recover fully from the pandemic. Using econometric analysis, the Council projects that a persistent COVID scenario could cost the global economy up to $9.5 trillion in cumulative output through 2024. The report also explores a scenario in which inflationary pressures prove structural rather than transitory. Again, the economic impact is striking, as the findings suggest that cumulative output could be $6 trillion lower than baseline forecasts within the three-year time frame.
"The economic implications of our analysis are profound," said Erik Peterson, managing director of Kearney's Global Business Policy Council and co-author of the report. "Persistent COVID and structural inflationary pressures together could create a serious drag on the global economy, and the repercussions for specific countries could be even greater. For companies, the key will be embracing digitalization and new technologies, bolstering supply chains, and considering automating key processes to reduce long-term costs."
The report also analyzes the implications of extreme economic protectionism, noting that countries have taken many steps to boost self-sufficiency in key sectors such as food and energy. Taken too far, these policies could mean more than $10 trillion in cumulative output losses compared with the baseline. And cyberattacks—a growing threat to companies around the world—could become an even greater challenge if a large-scale attack on multiple industries were to occur. As a result, public–private sector cooperation will prove vital in confronting these threats.
Lastly, managing demographic change remains a crucial question that companies must consider. According to Paul A. Laudicina, chairman emeritus of Kearney and founder of its Global Business Policy Council: "As advanced societies grow older, and populations in emerging markets swell, companies will need to respond to new challenges and opportunities. This means adjusting product lines and rebranding for older consumers in developed markets while taking advantage of growth opportunities in emerging markets."
More generally, the authors highlighted the need for businesses to engage in contingency planning. "While we surely hope none of these negative contingencies emerge, we must be prepared to manage unprecedented challenges in a world of continuous, convulsive change," Laudicina concluded.
Following is the full list of questions in Kearney's 2021 What If? report:
- What if the world fails to recover from the pandemic?
- What if inflationary pressures are structural rather than transitory?
- What if today's cyberattacks are mere opening salvos of what could morph into full-blown digital wars?
- What if the pandemic triggers a worldwide demographic inflection?
- What if the pandemic leads many of the major economies to reimpose protectionist policies under the pretense of national self-sufficiency?
Read the full report here.
About Kearney
As a global consulting partnership in more than 40 countries, our people make us who we are. We're individuals who take as much joy from those we work with as the work itself. Driven to be the difference between a big idea and making it happen, we help our clients break through. To learn more about Kearney, please visit https://www.kearney.com/
About the Global Business Policy Council
The Global Business Policy Council is a specialized foresight and strategic analysis unit within Kearney. Since its first CEO Retreat in 1992, the Council has been a strategic service for the world's top executives, government officials, and business-minded thought leaders. Through exclusive global forums, public-facing thought leadership, and advisory services, the Council helps to decipher sweeping geopolitical, economic, social, and technological changes and their effects on the global business environment. The Council consistently ranks near the top of the University of Pennsylvania's list of best for-profit private-sector think tanks and currently holds the fourth spot globally.
To learn more about the Global Business Policy Council, visit https://www.kearney.com/business-policy.
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SOURCE Kearney
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