It is still early 2024 and we are already at a crossroad! Will we see a period of slow economic growth or will we enter an exciting time of significant improvements in productivity? Either way - leaders need to make smart choices now.
Current Condition: Uncertainty and Certainty
Today's world is full of uncertainty. Over 50 countries will hold elections in 2024 and political tensions will be experienced globally. On a backdrop of ongoing wars and rising geopolitical risks, the economic outlook is mixed, at best. Major economies like China, the US, and Europe expected to not grow much. With fewer young workers entering the labor force and changing job preferences, it's getting harder to find enough employees. Interest rates and wages are up, so companies need to be more productive to keep making profits. Advancements in technology will lead to great discoveries but also steer us into uncharted waters full of ethical, moral, and legal dilemmas.
What we can be certain of - it will be a complex environment for businesses of all stripes. While some hope for a smooth transition in the economy ("soft landing"), issues like high prices, interest rates, and tight job markets make things tricky. Yet, there's hope. New technologies, like AI, energy breakthroughs, advanced materials, biomanufacturing, advanced robotics and so on, could lead to a time of plenty. Now is a great time for businesses to invest in a future that is not just successful but also good for the planet (and, of course - for the workers!)
Productivity is Today’s Primary Focus - The Impact of Technology
“Productivity Imperative in 2024" article by McKinsey stresses that uncertain times don’t mean negative business growth. Efficiency gains can come from training employees and changing how the work gets done (upskill and simplify!), from balancing the physical, human, and technical capital (optimize costs!), and putting money into the right technology and resources to help workers do more and help the business grow faster (smart investments!).
A cycle of productivity acceleration similar to one we might see in 2024 has occurred between 1995-2000 with in depth analysis and rationale from the Federal Reserve’s then Chairman Ben S. Bernanke: investments in general purpose technologies boosted productivity (in both technology- and non-technology-based businesses), optimized the workflows, enriched the offerings mix, opened up access to new markets and client segments, allowed for better wages and investment in the workforce that then afforded them a higher buying power - a virtuous cycle. Will we see a repeat in 2024?
“When shareholders and households invest and spend the value added they receive as income, they can initiate a positive, self-reinforcing cycle that translates to expanding markets for products and services and more value added.” (Productivity imperative in 2024, McKinsey)
The future could turn out in many ways, but one thing that can make a big difference is how productive businesses are and how committed they are to adding more value through their products and services. It is the opportunity for companies to not only help themselves, but also help the economy grow and improve everyone's living standards.
The Critical Role of Workers' Experience
And starts with organizations helping the workers so they can help the organization be more productive. What do workers want? More work flexibility and trust, less stress and micromanagement, more job stability and connection, and less burnout and “manager squeeze”.
Many of these can be enabled or simplified through technologies. Here are a few examples:
Personalized learning experiences that adapt to individual learning styles and pace will ensure more efficient and faster upskilling of the workforce.
Automation that streamlines the integration of existing and new technologies into the day-to-day flow of work will make the transitions between tasks and contexts smoother for employees which can lead to higher productivity and lower stress.
Automated analysis of vast amounts of data will help identify inefficiencies and suggest optimizations, aiding employees and enhancing the operational efficiency.
Virtual collaboration tools will make it easier for teams to work together effectively across locations and time zones, hence bringing more flexibility into hybrid work. It also can manage scheduling and task allocation for optimal productivity in a remote setup.
Enhanced leadership approaches and communication that support knowledge creation, agile work environments, and purposeful work.
Reframing the Value Creation Opportunity
Business leaders are key to activating the change and steer us into the era of plenty by investing in modern versions of general purpose technologies GPT (not to be confused with generative pre-trained transformers - another GPT). Let’s rethink the business strategies, technology, and operations. Let’s rethink what “value” is for all involved and invest in people. Let’s take advantage of the lessons from the past and lead the way to a time of plenty!
As we look towards 2024 and beyond, our actions will determine whether we face slow growth or step into a future filled with big advances. Let’s prioritize smart work and build a future that's good for everyone.
After all, in the end, are we not all workers?
In this blog post, we've initiated a broad discussion on the influence of general-purpose technologies in driving the next wave of productivity gains. In subsequent posts, we will delve into how these technological advancements present productivity opportunities through HR and workplace processes.