What does 2022 have in store?

Academics from across Alliance Manchester Business School share their views on what we could expect to see in the year ahead.

The pandemic has shown once and for all that the issue of employee wellbeing is no longer a ‘nice to have’. It is absolutely not about ‘mindfulness at lunch’ sessions either. Instead it needs to be a strategic issue for every business and organisation, just like sustainability, diversity or productivity.

In fact, employee wellbeing is now such a strategic issue that, in my view, every organisation should have a non-executive director who sits on the board and who has specific responsibility for health and wellbeing. An individual who holds the organisation to account in terms of how they treat, trust and value their workforce.

Given the huge changes in working lives driven by the pandemic, the issue has never been higher up the agenda. With many people continuing to work from home, today we crucially need line managers who can recognise when people are not coping and who have the correct social skills to deal sensitively with it. Because, let’s face it, hybrid and flexible working are here to stay. We are not going back and the evidence is clear that the vast majority of organisations are going to work a hybrid model.

There will continue to be much debate about what hybrid working really means in practice. I believe it means HR departments negotiating with each employee about what exactly works for them. But it also needs to be a contract, it has to be what the employer wants as well. For instance, there will be days when an employer needs the employee in the office. But the point is that it won’t have to be every day. Flexible working means just that, you flex your working week.

And those companies that insist their employees come into the office all the time will, ultimately, be the losers because they will lose talent, especially among Generation Z.

The year ahead will shine an even brighter spotlight on resilience, the need to be resilient, and how we build resilience.

COVID-19 has impacted us in innumerable ways and we know that resilience has been the cornerstone of how we avoid its deepest consequences and how to recover and renew from its impacts. It looks like coronavirus is determined to be with us on an ongoing basis, so it is our resilience to its effects that will enable our staff, businesses, services, economies, and systems to continue their function despite its disruptions.

In the year ahead we will hear more about how we build our own personal resilience – whether to alleviate pressure on our health system, to ensure our children can continue to attend their school, or to attend to our own mental wellbeing. We will also hear more about the resilience of companies that are preparing for the future and how they aim to get stronger to face new challenges. But we will also witness the demise of household names and hyper-local ventures that have not been sufficiently resilient.

We will also celebrate the resilience of our communities and how they have come together in the face of new adversities to protect themselves and provide for those most vulnerable. We will call for more action on building the resilience of our planet, be disappointed when our actions seem insufficient, and will deepen our concern for our environment and its fading resilience to the man-made impacts that seem irreversible.

Resilience is a term that captures so much about the strength of our people, our places and our processes. But in the coming year we will realise even more that we all have a role to play in building our resilience. It is for me, my neighbour, my employer, and my government to come together to build our resilience as a national endeavour. We cannot be resilient on our own, we need to work with others.

I believe that the greatest opportunity in the years to come will be in the area of individual engagement in health and wellbeing, and how commercial solutions can support this.

We will have to live with the consequences of COVID-19 on our health, on the health of the aging population, and on those most disadvantaged when it comes to accessing healthcare services. Many experts believe that one way to deal with these mounting challenges is by emphasis on health promotion and disease prevention, and by encouraging everyday lifestyle changes that could enhance individual quality of life, longevity, and mitigate the risk of future diseases.

As the public becomes more aware of the impact of such activities on their lives, some people are likely to seek commercial solutions that could help them meet their health and wellness goals. Technology innovations in health and wellbeing open many exciting commercial opportunities to optimise and increase various wellbeing and health interventions.

For instance I see technologies such as mobile apps and other digital platforms being optimised for personalised disease prevention, coaching and monitoring, with many of these platforms trying to embed real-time feedback matched to individual goals.

Personalisation can be considered at many different levels. An important factor in terms of whether such ideas are accepted will be whether the solution, the process it engages users in, and the final benefits fit in with the user’s beliefs, needs, lifestyles and goals. There is also an exciting opportunity for both the marketing and commercialisation of such personalised solutions too.

We can assume that the long-delayed Levelling-Up White Paper will finally be published in the early part of 2022. At the time of writing it was widely expected to come this month, but may have been delayed further by the investigation into gatherings at Number 10 being led by Sue Gray who is second permanent secretary in the Department for Levelling Up.

Downing Street’s search for proposals to reassure Tory voters (and MPs) in the so-called ‘red wall’ may also lead to some last-minute rethinking of the White Paper. This means that what we may get is now a little more difficult to predict, despite the various leaks over the last few months.

The territory of levelling-up is riven by fault lines. Between the interests of the new red wall MPs and those in traditional Tory heartland seats. Between those who wish to see a focus on ‘civic pride’ (more hanging baskets, fewer potholes) and those who want to see a significant rebalancing of our political economy, with greater devolution and major new interventions in areas such as skills, research and infrastructure outside London and the South East. And between the stereotypical Treasury viewpoint that everything has been tried and failed before, and the expert consensus that previous interventions have generally tended to be both sub-critical and subject to self-defeating chopping and changing.

Signals so far have been conflicting, but the message from the Treasury seems clear enough - no new money is available beyond that announced in November’s three-year spending review. Any rebalancing will have to happen within that budgetary envelope. In this context, the political temptation to go for lots of small ad-hoc announcements, rather than major, systemic changes to long-standing ways of doing things, will likely be too great.

The pandemic and recent events have demonstrated how much our economy and way of life depends on supply chains. Many industries are already starting to see an explosion in raw material shortages, with supply chains becoming increasingly unstable and unable to react swiftly to spikes in demand.

The electric vehicle (EV) industry is an evolving case in point. Traditional automakers, in their attempt to catch up with Tesla, will find themselves having to develop spontaneous supply chains as they struggle to keep up with demand for EVs. This will include the associated risks of securing raw materials for EV batteries such as lithium, nickel, and cobalt.

Climate change driven regulation will also play a part accelerating this. Thus it will be imperative to rapidly build spontaneous supply chains to deal with the demand and supply imbalance, primarily through pivoting, repurposing, ramping-up or orchestration.

We will also see the proliferation of spontaneous supply chain strategies at the macro-level. Nation-states will have medical reserves (similar to army reserves), where the country can call on trained citizens to respond at pace.

Governments will have to diversify and plan for parallel supply chains of critical medical products (e.g., PPE, vaccine, masks etc.) with a percentage of production based locally and the remainder overseas. They will also need to ensure spare capacity in domestic supply chains which will allow local manufacturers to ramp up production at short notice when supply chains get disrupted internationally.

Forecasting is notoriously difficult, particularly when it involves the future, the saying goes. Still, in the retail industry, we have witnessed some fairly stable trends that we can use as a basis for predicting what 2022 might have in store.

For instance, becoming a responsible business is one of the enduring trends that will gain further momentum in 2022. Retailers are widely adopting a net-zero agenda and are facing pressure from their customers to source products in a responsible manner.

I think 2022 will actually be a golden opportunity for the high street, with encouraging signs of plateauing or even reducing vacancy rates all over Europe. Macroeconomic factors such as inflationary pressure and pent-up demand, along with customers’ urge to be out and about after COVID-19, might cause a mini-boom for traditional brick-and-mortar retailing. If high street stores keep that momentum and evolve into inspiring retail destinations – and not simply places to sell products – they might have found their purpose vis-à-vis online going forward.

We have all witnessed the severe disruption that small (the grounding of the container ship in the Suez Canal) or large (global pandemic) incidents can cause to the supply of products vital to us. That realisation has led retailers to re-think their supply chains too, to make them resilient to disruptions and more agile. Therefore, expect significant investments in technology, forecasting, and scenario planning from retailers.

Finally, the way we shop will continue to evolve too. Smart retail technologies will go mainstream, while augmented or virtual reality applications, social commerce, and increasing use of non-traditional advertising will change the way consumers interact with retailers.

The challenges of the last few years have shown us the importance of connection in learning. In 2022 as the pandemic starts to move towards endemic and a new model of teaching is created, we need to put the concerns and priorities of our students at the heart of accounting education.

One of the top concerns faced by students is lost social skills as a result of COVID-19 lockdowns and restrictions, and empathy for this is vital as we plan for the coming year. The great resignation of 2021 also creates many opportunities for accounting and finance students, but only for those with the ability to connect to potential employers at interviews.

Another area of concern for young people is climate change anxiety. Although the much-publicised Cop 26 conference has been and gone, this does not mean that it is no longer on students' agendas. As we design our accounting education in 2022 we need to ensure that we are empowering students to be able to find their own role in sustainability and climate change, as well as able to critically assess the claims made by companies.

The familiarity with video conferencing has made the world smaller, enabling students to connect to others around the world as easily as connecting to someone in their home town. Thus in 2022 and beyond inspirational speakers can bring accounting education to life with their stories. Financial literacy can also be more easily brought to those who could not previously access it.

Now that blended learning is becoming more common place, the basics of accounting and business can now be delivered to students using a range of media for them to study autonomously. This frees up classroom time for meaningful student-led discussion on what they really care about - developing their skills, climate change and connection.

Indeed, as we navigate this new model of teaching my mantra from the beginning of lockdown remains as important as ever - always choose connection.

I predict a big year ahead for entrepreneurship. The pandemic showed the versatility and flexibility of start-ups and SMEs with a record number of new business registrations and many examples of existing businesses pivoting to adapt to pandemic conditions.

With an element of uncertainty still in the year ahead, these will be important traits. With furlough schemes ending and unemployment likely to rise slightly, this could potentially generate more necessity-driven entrepreneurship during the year.

The pandemic has highlighted important inequalities in society and with more opportunity for introspection whilst working remotely there has been a renewed interest in social entrepreneurship. The government has promised to make it easier for social enterprises to apply for council contracts which could be a vital supply of income, as well as opportunities for social enterprises to scale up.

Meanwhile, with the continued focus on climate change there is evidence that entrepreneurs are looking at opportunities to improve the situation – and there is pressure on the government to support them. Green entrepreneurs are challenged by needing to be cost-effective yet eco-friendly and whilst private investment in this type of business is at record levels, the government could create more incentives including tax breaks to further help.

From a government perspective, entrepreneurship, in general, is seen as a way of boosting the economy with much of economic growth traditionally coming from SMEs. I would therefore hope for more policies to encourage start-ups and SME growth, including policies to help overcome Brexit issues.

Based on my research on grand crises and business models, I believe 2022 will be characterised by the convergence of the two grand crises of COVID-19 and climate change.

Many of the pop-up business model innovations in which organisations have adapted to either one, or both of these trends ‘on the go’ and in crisis mode, will become business model innovations that stick and become normalised.

Equally, these two innovation-driver forces will converge to transform business models. Think a COVID-safe tourism business model that is at the same time climate restorative. For instance, we will see how some business school business models become permanently blended, online-offline research and teaching organisations, addressing both COVID-19 and CO2 emissions concerns by doing so.

More widely, the companies in the most intense crossfire of the effects of both crises will be the first to adapt their business models, or to go bankrupt. Think disruptive innovations of air travel, fossil fuel energy, and leisure businesses. The first companies will be pioneers in their respective sectors, to diverge from long taken-for-granted norms, and disruptively reshape the practices that make their business model. And if it is done right, also in preparation for the next crises to arrive hot on the heels of COVID-19 and climate change.

Yet, the best and most valuable of such business model innovations will not be the adaptive ones that create crisis resilient businesses, but rather the proactive innovations that at the same time make mitigating the causes of likely future crises a core part of value propositions.

Equally, we might see how additional grand challenges like biodiversity loss, the global migration crisis, or economic inequality enter into the red-hot crisis stage and become additional game-changing transformative forces, yet again leading to more adaptive and proactive business model innovation towards the end of the year.