Contrary to popular opinion, there will be news other than the presidential election this year. Below are a dozen trends that will impact businesses in 2020 and beyond according to Forbes.
1. Consumers Still Spending
While the U.S. economy will grow modestly (2.5%) in 2020, consumer sentiment is still strong. With consumer spending representing two-thirds of the U.S. economy, business-to-consumer companies are still performing well. According to CBRE, online sales will grow another 14% in 2020. Interest rates are at an all-time low, and home sales spiked at the end of the year. Because of this, I believe 2020 will be a strong year for consumerism.
2. Streaming Wars
What happens when four S&P 500 companies launch a product into a crowded sector at the same time? A streaming war.
According to Bloomberg Businessweek, the average consumer will subscribe to three to five streaming services. From my perspective, this could be bad news for Netflix, which had the first-mover advantage but is now subject to new competition from Disney+, Apple, Amazon and others.
3. Tech Under Attack
Once the darlings of Wall Street, tech stocks are under fire. In Europe, Facebook, Apple, Netflix and Google are under attack by EU regulators over privacy, and here, we’re seeing some politicians propose antitrust action. In 2020, the California Consumer Privacy Act will come into play, which could be a preview for what is to come at the federal level. Look for more breakup talk during the presidential election.
4. Tariffs To Be Continued?
So, what will happen with tariffs? It’s hard to say. However, even if any announcement is made around the time this post is published, I believe it’s best to be highly skeptical. For example, even if a deal is made with China, any action to unwind business practices there would likely take years to implement. While the tap could be opened again for U.S. imports, remember that they will be at a higher cost than they were before.
5. AI Protects The Universe
Adversarial machine learning is being used to combat cybercrime. According to a Capgemeni Research Institute study, 61% of enterprises said they are unable to detect breaches without using AI. In 2020, AI’s most important application will be to protect us from hacks. Given its extremely high cost, I predict that AI as a service will emerge as a product used by smaller companies that can’t afford it.
6. Battle Of The Cloud Titans
Silicon Valley is in a war for cloud computing supremacy. Cloud platforms, including software as a service (SaaS), data platforms as a service (PaaS) and infrastructure as a service (IaaS), will be a $250 billion market in 2020, with top providers, such as Amazon, Microsoft and Salesforce, duking it out. Prices could fall, especially as companies bundle applications.
7. #MeToo Circa 2020
According to Equal Rights, there was an 80% increase in the number of sexual harassment bills introduced in state legislatures this year. Many of those will go into effect in 2020. With them comes new awareness from employers who are implementing equal pay strategies, improved maternity leave, flexible work arrangements and childcare options.
8. Man In Space
According to Space.com, in 2020, SpaceX is planning a Demo-2 mission that will carry NASA astronauts Doug Hurley and Bob Behnken to the International Space Station. Private space travel is to follow. 2020 will also mark the beginning of a litany of military and commercial drone flights by unmanned spacecrafts, which are nimbler than satellites.
9. Here Come The IPOs
Saudi Aramco’s record IPO caught the attention of investors, with a valuation well over $1.5 trillion. Companies expected to go public this year include Airbnb, GitLab and Neptune Energy, among many others.
10. Businesses’ Role In Social Change
Perhaps at no time in history have businesses been more in tune with their responsibility to protect the environment, ensure equality and advocate for social issues. While many startups and social enterprises have long sought out double and triple bottom-line results, there is a sea change underfoot where more traditional businesses are seeking out their purpose beyond making a profit.
11. Changes In Latin America
According to CNBC, Venezuela’s hyperinflation rate has increased to 10 million percent. The U.S. imposed steel and aluminum tariffs on Brazil and Argentina earlier this year, but their economies are expected to grow this year. 2020 could bring a renegotiation of NAFTA and, hopefully, new ambitions for U.S. companies that would like to bring production to Mexico.
12. European Woes
Strikes in France, slowing production in Germany and Brexit make for a slumping European economy. Should interest rates go below zero (yes, that is a thing), the global economy could be sparked into a recession. Business leaders should be proactive in identifying predictive indicators that correlate with demand in their industry sector (such as various purchasing indices or durable goods orders).
At the least, it will be an interesting time to be running a business. Make sure your team is in a position to capitalize on the changes in the year ahead.