Predicting business trends is risky. Even with lots of resources and a good product or service that consumers will like, it takes time to predict your business’s success. Predicting a year or 10 years from now is even harder.
Most businesses fail after ten years. Half of the small businesses fail within five years. Starting a business today in one of the ten most in-demand industries, listed below, is likely to succeed ten years from now and grow quickly and profitably.
Shifts in global value chains
“Slowbalisation” is the 2020s. Due to rising labor costs (and cost mitigation investments like robotization), diversification, and changing geostrategic goals, supply chains are being reorganized quickly. Tariffs and self-sufficiency dominate US-China relations and Brexit. These changes will affect the entire economy, starting with high-tech and raw materials.
As global value chains realign, cheap manufacturing and pro-trade economies will grow. Smart investors should consider actors who will enable this growth. They should also avoid infrastructure firms in countries affected by these changes (e.g., Chinese cargo and manufacturing companies).
the creation of dual supply chain models
Many companies will need to create distinct operating models to maximize market capture while complying with national policies to survive the East/West divide. Insurance and expertise will be in high demand. To reduce risks, fully globalized companies must invest heavily in new supply models.
decreased M&A activities
The 2020s geostrategic context will heavily impact M&A. Transnational deals, and national resilience/autonomy will be scrutinized. Defense and IP-heavy industries need this. Low trust between actors will hurt semiconductor and communication companies.
Higher interest rates and inflation
COVID-19 and our response have caused a perfect economic storm. Inflation and higher interest rates result from supply constraints and national debt.
This is setting up a 2020s macroeconomic era. As businesses and households adjust to a new system and governments cut spending or raise taxes, growth, and consumption will change in the next decade. Investors prefer cash-generating investments over growth investments.
buying less and renting more
High-interest rates will force companies and states to reassess their assets, whether real estate, credit, equity, or large infrastructure. Actors will prefer renting or repairing assets over buying them. While new manufacturers may benefit, mortgage and durable goods companies will suffer.
shifting consumption patterns
Middle-class people know inflation is putting pressure on disposable incomes. Spending will drop. Many companies cannot pass on rising costs to customers for economic or legal reasons. Cost-cutting will surprise us and benefit the most powerful.
the slowdown of the welfare state
Governments need to balance their budgets after spending tons of money on COVID-19. This may involve raising taxes and cutting waste. Lower-income people and R&D-dependent companies will suffer as state investments decrease.
The changing nature of work
Digitization and globalization enabled remote work. COVID exacerbated this trend. Many workers left cities and won’t return. This will affect city planning for decades.
This skill has been relevant for nearly 20 years. Five years now. Companies must regularly fund training. Massive investments are needed. Even after spending millions on training, companies need help to retain talent.
Office workers will experience what happened in factories for a generation as AI and workforce retention become harder. Economic headwinds are bringing white-collar automation.
reshaping of cities
Work changes cities. We work, what could have been. Workers and companies will continue to move from high-cost cities to rural areas that are nicer and cheaper. This hurts commercial real estate and luxury residential areas in large cities but benefits everyone else.
hybrid working shifting consumption trends
Hybrid workers work from home and commute less. It’s obvious. However, how this will change consumption patterns from metros and offices to homes is still being determined. Office consumables, business hospitality, and catering (hopefully Post-Its) will continue struggling.
reskilling / upskilling
Technical skills today are short-lived. Continuous retraining is required. Companies do this, but workers will increasingly seek self-education. Failure to train employees risks short-term employer unattractiveness and long-term competitiveness.
increasing productivity pressures on workers
Workers are being asked to use new technology to do more with less. AI is bringing philosophical and blue-collar issues to air-conditioned offices. This is bad news for low-skilled jobs (call centers, low-level coding, CEOs).
The changing demographics
Demographics are changing. The working-age population in developed nations is shrinking as fertility falls and life expectancy rises. This will significantly affect state budgets, automation, and consumer spending.
Governments must deal with rising healthcare costs and lower pension participation. People will invest in creating their safety nets. This article fits this trend.
labor pool shrinkage, increasing productivity demands, and skill premiums
As seen above, fewer workers mean more pressure to do more with less. Automation (mostly in factories, but office workers, beware) does this. Demographic pressures boost labor market value for certain skills. Immigration or offshoring will be used to find that skill.
increased demand for elderly products, services, and healthcare
Life expectancy will increase in senior populations worldwide. This will boost elderly product and service demand. Healthcare costs will rise. Labor-intensive industries like agriculture and restaurants that rely on declining population expenditures will likely suffer from this trend.
short and long-term fertility dips shrinking demand for childcare
COVID-19 reduced birth rates. And will fall. Many women will return to work after childrearing. This will increase women’s work-related consumption (e.g., clothing). More women entering the workforce may reduce wage pressure in health, teaching, and personal care.
Investments in riskier assets will increase as more people believe they won’t have a pension to retire with dignity. Wall St. Bets and meme stocks were just the beginning, and banks will profit as armies of retail investors join bag holders.
The sustainability and energy transition
Sustainable products and services are growing in demand. However, underinvestment in new energy sources will slow a green transition. Short-term energy decisions have harmed long-term green investments due to the Ukraine war. This and future lower government investments (older population = fewer taxes) will cause decades of energy supply and demand imbalances.
new energy usages and efficiency measures
Despite decreasing public investments, energy trends are likely to continue. Thus, green energy demand and efficiency will rise in the 2020s. Manufacturing, new construction, and households especially. However, whether mining and oil & gas shrink is still being determined.
sustainable retail consumption
Developed-country consumers will continue to prioritize sustainability. While hard times may make some reconsider their choices, many have come to (rightly) believe that an energy transition is necessary to protect humanity. This is good for some industries but bad for fast fashion and plastic manufacturers with large environmental footprints.
green(er) public transportation
Cleaner transportation is needed due to urbanization and the realization that pollution kills. Electric vehicles, ride-sharing, and emission-free public transportation are examples. EV leaders benefit from this, while laggards suffer.
the sustainable economy ecosystem
All of the above changes require a broad stakeholder base. Some companies will lead the energy transition, while others will assist (consulting, compliance, sustainability analytics, carbon accounting, and certification). Without the spotlight, these secondary actors will benefit from market growth.
Staying informed about global trends and how they may affect our daily lives is important as the world changes. Understanding the current landscape helps us adapt and make better decisions. If we can earn money safely and ethically, great.