What does 2023 have in store?

2022 was marked by major crises at home and abroad. Will things improve in 2023? AMBS academics share their predictions for the year ahead.

The crises of 2022 have increased levels of job insecurity, depleted financial and psychological wellbeing, and undermined people’s overall sense of security. Sadly, I fear we will see greater job losses over the coming months as organisations attempt to deal with rising prices, wage increases, energy costs and the like. 

What causes people to experience serious stress in their lives is uncertainty and lack of control. The uncertainty surrounding the performance of the economy, energy supplies and rising prices is out of the control of most people.

But we all have some control over what we do for a living. In fact, there is still a skills shortage in the UK and this is the perfect opportunity to think about our futures, particularly when it comes to our jobs, who we work for, and our careers.

The pandemic has encouraged many to reflect on their futures and what they want out of life. Among the Zgen and young millennials we are seeing a move toward ‘quiet quitting’, where they work their 40-hour weeks but don’t want to commit to a long-hours, workaholic culture.

Instead, they want a better quality of working life and more balance in their lives. I suspect we will see this trend in older millennials and mid-career professionals/workers as well over coming years. 

This will also lead to greater mobility of talent and employers creating a more meaningful culture where people have more autonomy and control over their job and get better balance between their work ambitions and private lives. 

As John Ruskin, the social reformer, said at the beginning of the Industrial Revolution in 1851: “In order that people may be happy in their work, these three things are needed. They must be fit for it, they must not do too much of it, and they must have a sense of success in it.”

When making my predictions a year ago, I commented on the importance of connection in learning, and it has been wonderful to have a full semester of being in the classroom and of students seeing the benefits of in-class discussions.

In 2023, I think we will move towards a better balance where we can appreciate the benefits of remote working and learning, as well as appreciate the enhanced engagement which comes from discussions which are conducted face-to-face. 

Seeing more students back on face-to-face work placements this year has also been fantastic, and I think 2023 will bring more opportunities for students to take advantage of these transformational experiences. 

Last year I felt hopeful that we would emerge from Covid isolation into a world with more opportunities and the space to reflect and act, but the global crises of 2022 have increased anxiety across the board. So as we plan for 2023 we need to consider these wider challenges faced by us all. For instance young people in particular continue to raise issues around climate change anxiety. 

Summing up, 2023 will give us the chance to set up a better routine of flexible learning. We can use face-to-face time to take advantage of building connections, sharing ideas, and taking care of each other to avoid burnout. 

And the year ahead will also give accounting educators the chance to connect to ongoing debates on the social and moral side of accountability, and use this to inspire students to develop the skills they need to adapt and flourish in our rapidly changing world.

After a year of turbulence both at home and abroad, entrepreneurs will be hoping for a year of stability where they will be able to plan with some degree of confidence.
Here in the UK a recession is widely predicted which could further reduce customer disposable income, adding to the cost-of-living crisis. This is part of an ongoing series of problems for some industries such as hospitality which has seen grain and energy price rises affecting craft breweries and distillers, and a shortage of staff partly due to Brexit. 

However, since COP27 there is much more of an acceptance that climate change and green issues need to be addressed more urgently so entrepreneurs working in this area will have opportunity, market, and funding available. 

The government has also recognised the need for R&D with the latest announcement in the Autumn Statement of a £20bn spending commitment. Also, Sir Patrick Vallance, better known for his Covid news conferences, is chairing a group looking at ways to reduce bureaucracy and red tape to speed up getting new tech innovations to market with green tech firmly in focus.

The most successful entrepreneurs in 2023 might be the ones who can find inventive ways of cutting costs or business model innovations to keep prices in reach of cash-strapped consumers, as well as those addressing urgent societal needs.

The memories of Covid-19 are fading, and the temporary arrangements put in place to support the response to the crisis have now long since gone. 

The next year will therefore be spent responding to the new ambitions for resilience which are informed by those memories and the learning that will be taken forward. Indeed, these ambitions will soon be published in the government’s National Resilience Framework which we have been contributing to. 

How we operationalise resilience, in particular societal resilience, will be critical over the coming year. This is a local endeavour, focusing on those who are most at-risk, vulnerable, unaware, unprepared, and unable to self-help. 

As the goodwill shown by communities during Covid-19 is fading, local government and partners across the UK are thinking about how we prepare for the next crisis – wherever and whenever this happens, and whatever this is. In the next emergency, communities will continue to provide an important support to those who are most affected. But the coming year needs to put new emphasis on the role of business in this complex landscape – especially businesses that perform critical local functions. 

Businesses can support local communities and also benefit from that support so that communities are impacted less and recover quicker. The role of business needs to rise in its importance in this agenda and our National Conference on Societal Resilience - to be held at The University of Manchester in March - will ignite a series of new conversations in the coming year across this challenging landscape, involving new partners and spotlighting the potential of societal resilience for community development.

The most immediate challenge the retail industry faces as the New Year starts is the cost-of-living crisis. Since 2021, consumers have been experiencing a fall in real disposable incomes as inflation outstrips wage rises. In such an environment, one would expect the discount retailers to be the winners. Sure enough, their market share has increased to 21% in 2022 and their success looks set to continue in 2023.

However, it seems we are near the peak of inflation and we will hopefully see the rate dropping as the year progresses. This will be psychologically important for consumers as falling inflation might entice them to hit the high streets. And retailers that are then able to inspire consumers will benefit the most. 

Although there still might be pent-up demand for consumer goods, I think with big-ticket items we might witness a new frugality. The trend to ‘make do with less’ seems set to stay, and in particular I would expect the younger generations to consume less and make more sustainable choices.

Retailers have to adapt their offerings accordingly and think about new forms of “ownership” – whether this is sharing, renting, recycling or up-cycling. New business opportunities are waiting for agile retail businesses in that space.

Another opportunity for retailers might be found in the virtual world and the metaverse. But they have to be careful because, as of now, it is unclear whether this new avenue will go mainstream.

As someone that used to work in investment banking and now has the pleasure of teaching practical investing to students, I am really excited about 2023.
 
Why? Because for the last 12 years or so we have mainly seen a rising equity market. Interest rates have been low and inflation barely existed. Many of our students have never seen anything but shares going up, money being cheap and tech leading the way. 

For the last few years I have been trying to teach students that these markets are not normal, not everything will always be profitable or generate +10/15% return per year. Risk is very much a real concept that investors need to consider. 

In the year ahead, more defensive sectors such as healthcare and consumer staples, which should not be hit so hard by a slowdown in growth should ride out the storm. Cyber security, energy security or food security should too.

With rising interest rates, there should be more possibilities to generate income. For instance, in the bond markets I predict investors will consider good credit and possibly shorter dated bonds. Alternative investments such as hedge funds, commodities and private markets will also be considered in investment portfolios as alternative asset classes tend to have a low correlation with traditional asset classes and can therefore reduce volatility and uncertainty.

One thing is for sure though. 2023 is sure to remain bumpy, so make sure to buckle up so you can enjoy the ride.

It is always nice to be right, one might think. Not in this case. I had ended last year's predictions with the strong hunch that 2022 would see the emergence of another grand crisis on top of the climate and Covid crises, and sure enough that came in the shape of Ukraine.

However, I was also wrong. I had predicted that the combined pressures of climate change and Covid would produce genuinely transformative and disruptive solutions. But the fallout from Ukraine has led to actions which run against this.

For instance, in blatant contradiction to the country's climate change ambitions, there will be a new coal mine in the UK for the first time in three decades. And Germany is also bringing back old coal mines and locking itself into new fossil fuel supply contracts. 

Given these dynamics, it is not surprising that the COP27 agreement gave up on long established climate targets and instead tried to accept, live with, and compensate for the consequences of losing the fight against climate change.

However, making trade-offs that address one crisis by ameliorating the other is a recipe for another level of disaster. Decision makers have to realise that the ultimate grand challenge of our times is not fighting individual crises one at a time through short run measures. It is to take often painful, disruptive, complex measures that enable us as humanity to survive the age of accelerating grand crises.

Data-driven decision making has become widely recognised in business and management over recent years, and I believe that the adoption of data-driven solutions will continue to thrive in 2023 as more and more businesses realise its importance. 

For instance, it enables business leaders to respond more efficiently to the uncertain and rapidly changing environment and improve decision-making processes. An e-commerce company might track and analyse marketing, customer and sales data to better understand how the pandemic has changed customer purchasing behaviour. Or a telecoms business might combine multiple sources of customers’ data, complaints, socio-demographic information and geographical factors together to predict customer churn. 

With data being generated in unprecedented volumes, the process of collecting, managing and analysing it is a huge challenge, especially for SMEs. There will probably be an increasing shift towards cloud-based and ‘one-stop-shop’ solutions, where everything from data management and analytics to visualisation with interactive dashboards can potentially be done in a streamlined way. 

There will also be more regulatory elements around data analytics and Artificial Intelligence in business and management, such as data protection, governance, privacy, trust and ethics.

In the meantime, data and digital skills will become increasingly important in many more workplaces, and this requires business schools to keep enhancing information technology, data analytics and digital transformation elements in our teaching portfolios and better prepare our students for their digital futures.

Will 2023 be the year where the world of higher education starts its final transformation from one where lecturers, classrooms and students are key, to some new future? And if so, what exactly will that new future look like? There are two possibilities - one dystopian and the other utopian. 

The dystopian one will see chatbots writing essays for students and plagiarism software evolving into marking bots. Both will replace students and professors, very likely in an institution which is not a university of the traditional kind. The utopian future will see these new bots aiding learners and teachers and augmenting their capacities and skills. 

The reality will very likely be somewhere in between with an increasingly fragmented higher education sector, the entrance of new providers, the growth of continuous learning and the emergence of new professional figures. 

We could also see the reinvention of case study pedagogies who will become game studies in a metaversity, a platform where exchanges will happen with crypto-currencies and marks will become tokens to be accumulated and spent in metaservices, as my colleague Vlad-Andrei Porumb predicts.

Is the university as an institution ready for such change? Whatever the future will be, dystopian, utopian or somewhere in the middle, my prediction is a resounding ‘no’. My hope though is that this prediction is wrong and that one of the oldest institutions in the world will be able to adapt if not even serve the need for change, evolution and revolution. 

In 2023 we will see ARIA, the UK’s new £800m ‘high risk, high reward’ funding agency build out its team of programme managers and begin its work in earnest. However, we still don’t know very much about what it will actually do, or how it will fit into the wider research, technology and innovation ecosystem of the UK. 

We will also see issues of research culture and productivity continue to weigh heavily on funders and research leaders alike. For instance, there’s been renewed interest in cutting bureaucracy in public research funding, but much bureaucracy is actually in the research performing organisations which ‘gold-plate’ funder requirements through excessive caution (or ignorance), and which over-centralise administrative processes. 

In 2023, we will gain a better understanding of the picture concerning private (company) investment in R&D in the UK. The Office for National Statistics has recently revised its methodology for estimating private R&D spending in order to better capture spending by smaller companies. It seems likely that the UK has already achieved its (relatively unambitious) target of spending 2.4% of GDP on R&D. If this is the case, where do we go from here? 

Meantime rampant inflation will certainly eat away at the spending power of both public and private R&D investments. Private spending on R&D will also be hit by the likely recession, and changes to the small companies R&D tax credit regime may compound this. 

The effects of the cost-of-living crisis, global events and government messages on student immigration on university income will also have an effect, because publicly funded research conducted in universities is subsidised by teaching income. 

The metaverse office is about to come! In 2022, office workers spent far too much time in online meetings, which has only been effective to a certain degree. Yet going fully back to the office is still not the norm for many organisations, many of which are scaling back their office floorspaces.

Organisations therefore need to broaden their horizons and start experimenting with alternatives for online meetings. One such alternative would be to start piloting the metaverse, a network in the virtual world combining augmented reality (AR), virtual reality (VR), and the Internet to provide a fully immersive, three-dimensional experience to users. 

The metaverse is already used as a business model in sectors such as gaming, but more relevant for many organisations is the use of the metaverse as a tool. For instance in the area of training, it can be used to simulate different settings in a virtual world and can provide endless possibilities which are close to real-world experiences at a fraction of the cost. 

The office in the metaverse will also bridge the gap between participating online and engaging online. Connecting in a metaverse office is as immersive as meeting in a physical office. Young professionals already have a social life in the metaverse, so for them expanding the metaverse into the office is just a small step. Organisations therefore need to invest in metaverse offices and create their own environments for employees, contractors and partners - and at a later stage for customers too. This will supplement not only physical interactions but also replace online meetings. 

However in implementing metaverses, organisations do need to be mindful of employee safety and well-being, and ensure diversity, equality and inclusion. Therefore monitoring and supervision of the metaverse will also be essential.