The New Face of Growth in 2021
Over the last 16 months, the manner in which American businesses view growth – and the avenues to achieve that goal – have drastically changed. Technology and digital acceleration are among the clearest trends that have emerged from the COVID-19 pandemic, with both remote workforces and customers pushing organizations of all sizes and industries to evaluate their digital transformations. We watched shifting consumer behaviors force companies to rapidly change where and how they interact with their customers.
Arriving with these changes is a new face of growth. Looking ahead, businesses will have to plan for future growth in a much different way than they were accustomed to.
A New Business Strategy
These are just a couple examples of the systemic changes that could be ahead for the way in which American companies do business. I draw attention to these trends not to sound an alarm, but rather to underscore how the business landscape is changing – and what companies can do to adapt accordingly. For the thought process around growth should be categorically different than it has been in the past.
Over the past year, we’ve seen businesses shift to survive – from developing ghost kitchens to the rise of delivery services for various industries. The words “virtual” and “remote” have become a part of our everyday lexicon. Digital transactions continue to increase – the pandemic accelerated our movement toward digital payments, with the percentage of consumers reporting using cash at least once a month declining from 82.4% in 2019 to 74.7% in 2020, according to an Atlanta Fed survey. As businesses adapt to digital payments, a whole host of financial tools will arise to take the place of hard currencies.
Connecting with consumers may be the most dramatic shift as our associations have transitioned from geographic regions to digital communities. These shifts will have lasting effects and businesses will have to think about growth differently than they did in pre-pandemic times.
A New Regulatory Landscape
The U.S. economy is on its way to a strong recovery emerging from the pandemic. According to the Federal Reserve’s July Beige Book, “The U.S. economy strengthened further from late May to early July, displaying moderate to robust growth” in sectors ranging from transportation to travel and manufacturing. At the same time, the way in which the economy grows – and how American businesses operate – is coming under increasing scrutiny. For companies of all sizes, these sea changes will impact countless factors affecting the cost of doing business.
In the financial services industry, one of the biggest trends emerging from the last year has been consolidation – thus far in 2021, global mergers and acquisitions have totaled a record $2.4 trillion, up 158% from the same period last year. In the U.S. alone, deal making rose 440% with $699 billion worth of M&A deals, as companies take advantage of cheap capital and spend large cash reserves accumulated over the course of the pandemic.
Most recently, that trend could face major headwinds in the form of President Biden’s sweeping executive order “to promote competition in the American economy,” which could well have a chilling effect on M&A activity amid heightened regulatory examination.
Another area of developing regulation is in the space of data privacy. One clear shift during the pandemic was toward digital spaces – according to PwC’s June 2021 Global Consumer Insights Pulse Survey, more than 50% of global consumers reported using digital devices more frequently than they had six months earlier. Through that shift, businesses have inevitably amassed more data from their customers – raising potential concerns about the safety of that data and sensitive personal information.
While the U.S. currently lacks a federal data privacy policy, regulation in this space could well be on the horizon, meaning that businesses will have to anticipate data management as they plan for growth. potentially spelling major changes to how companies handle their customers’ data and privacy.
Ultimately, for companies of all sizes, it’s incumbent on leadership to adapt and evolve. Employees and clients expectations are higher than ever, leaving little room for error – but also opportunity for those that can capitalize on it.
This article was written by Frank Sorrentino from Forbes and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.
