[Part 1] IÉSEG Faculty outline some business trends to follow in 2023
01/04/2023
4 min
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From corporate strategy to commodity prices and the legal trends impacting business, four members of faculty outline their views on some of the key issues they are looking out for in their fields in 2023.
In the second article in this series, four other faculty members will highlight their views relating to the metaverse, the circular economy, quantum technology and financial management.
Finance and Economy: Commodity prices, inflation and precious metals
By Athanasios (Thanos) Triantafyllou – Professor of Finance
“I believe the energy sector will continue to be the primary concern of investors and policymakers in 2023. Given the ongoing geopolitical tensions and rising demand for energy, the expectation is that oil and gas prices will rise in the first quarter of 2023 and will revert towards their pre-Ukraine war level by the end of 2023. Electricity prices are expected to follow this trend, especially during the first quarter of 2023, during which the demand for the relatively cheaper electricity heating is expected to rise further.
Regarding the overall price levels in the economy, the expectations for 2023 is that the inflationary pressures (due to rising oil prices) will continue to exist, although to a lesser extent than at present (early December). With the energy sector continuing to drive inflation and inflationary expectations, it is highly anticipated that 2023 will be a year with continuously rising consumer prices still having a severe impact on the real household income and purchasing power. However, in relative terms a more moderate inflation rate, compared to the rates observed during 2022, ranging between 4% and 6% is expected for most of major advanced economies.
Finally, I think the increased uncertainty about inflation and economic growth will continue to shift global investors interest towards safe heaven assets and hedges against inflation like the precious metals. Therefore, as long as the geopolitical tensions continue to evolve, the rising demand for precious metals will result in further increases in the price of gold, platinum and silver.”
Corporate Strategy: Collective survival plans for companies in tech ecosystems?
Loic PLE – Professor in Strategic Management
“In my view, 2022 was marked by two major business upheavals: the demise of FTX, the world’s second crypto-currency exchange , and the increasing number of questions around the development of the Metaverse.
I believe that both these factors will lead a large number of companies to think very carefully before launching either blockchain- or Metaverse-related projects – as it seems has already started.
Likewise, ecosystems that have built their strength on technology will probably investigate their dependence to it and examine how resilient they are, should this technology fail or be attacked. By doing this, I believe that companies in these ecosystems are likely to develop or consider collective “survival plans” to face such potential issues. This is a crucial, though very difficult matter, given how interconnected firms can be in ecosystems.”
Management & Human Resources: Overarching DEI strategies
Mamta Bhatt – Professor of Human Resources Management
“Several recent studies conducted by leading consulting firms such as McKinsey and BCG suggest some encouraging diversity, equity, and inclusion (DEI) trends as well as concerns that need to be addressed in the future. Companies are ramping up their DEI initiatives, with more and more of them establishing a position dedicated to DEI. Potential and future employees – especially those from generation Z – are also prioritizing companies that have such policies in place.
I believe it will become increasingly important for companies to look at diversity more strategically. For instance, relatively few companies have adopted metrics to measure how effective their DEI measures are and going forward, it will be important to understand that what we need is not one-off initiatives but a carefully thought-out diversity strategy for the company. In terms of examples, we noticed during the pandemic that an increased number of women left the workforce, a trend that was particularly visible in women with children. Companies, therefore, will need to think beyond the paycheck and have initiatives (including flexible work) for supporting their employees.”
Law: Some legal trends to follow in 2023: AI, data, IP, CSR
Maximiliano Marzetti – Professor of Law
“In 2023, it is likely that the legal environment of business will continue to complexify due to the multiplicity of actors engaged in transnational regulation and the consequence of geopolitical reshuffling.
Artificial Intelligence (AI) regulation will continue to occupy countries as they attempt to guarantee that algorithms respect the rule of law and human rights whilst providing a legal framework that can attract business and investment by providing legal certainty. In this regard, it will be important to follow the future of the EU’s AI Act and AI Liability Directive proposals.
Attempts to facilitate transnational data transfers between the EU and the US may lead to a new transatlantic framework, perhaps in 2023, hopefully overcoming the shortcomings of the previous Privacy Shield, invalidated in 2020.
For brand owners and investors who might be interested in the metaverse, for instance, in Non-Fungible Tokens (NFTs), it is likely that Intellectual Property Rights (IPRs) will likely remain a highly discussed topic.
Finally, the trend to make corporations accountable for human rights violations throughout the global supply chains is likely to continue. In this respect, the French Duty of Vigilance Act of 2025 will be six years old in 2023, and the EU will discuss a new Directive proposal on Corporate Sustainability Due Diligence.”
