Challenges and changes will be the hallmarks of 2016, but this year will also present great opportunities to far-sighted, innovative individuals and organizations.
1. Economic headwinds intensify
Canada has been hit hard by the continued fall in the price of oil and other commodities, on which our economy depends heavily for investment and revenue. Not surprisingly, the province of Alberta has suffered disproportionately, with tens of thousands of jobs lost; the provincial government has also seen its tax and royalty revenues drop, inducing a large fiscal deficit. A lower loonie is the inevitable consequence of a fall in foreign investment to Canada’s extractive industries.
Of course, the global economy is highly integrated, and difficulties in one nation are usually indicative of broader trends. The weakening of commodities owes largely to a slowdown in the Chinese economy, due in part to persistent soft demand for Chinese manufactures in the most lucrative consumer markets: the U.S., the European Union, and Japan. China has managed to sustain a relatively high growth rate since the 2008 Great Recession with the help of public expenditures and private credit. But this tactic seems to be nearing the end of its rope, and investors are nervous about the implications—hence the volatile stock market.
All in all, 2016 is likely to be another year of economic uncertainty, and recession is a distinct possibility for many industrialized countries, China included.
2. Millennials move up; Gen-Zers enter the workforce
It’s hard to believe that fears over “Y2K” came and went more than 16 years ago, yet here we are. In 2016 and in the years to follow, we will witness a major demographic shift in the workforce: Baby-boomers will continue to retire or cut back on their hours; Millennials will scale the professional ladder into positions of greater authority and prominence; and members of Generation Z—also called Post-Millenials or iGens, born in the era of boy bands and Spice Girls—will increasingly fill entry-level posts.
The visibility of this shift toward youth in business and politics will grow, as will its influence on consumer-market dynamics. Businesses that cater effectively to the preferences of the under-35 cohort by embracing mobile technology, values like social justice and environmental sustainability, and somewhat non-traditional work environments, will prosper.
3. Departures from “business as usual”
Infused with youthful vigour and an innovative mindset, many organizations are adopting new ways of working.
Some workplaces have introduced elements of fun and relaxation into their office environments—like ping pong tables, recreation areas, and even dedicated spaces for taking naps. Others offer flexible work schedules, including unlimited vacation, conditional on employees completing all of their assigned tasks within a set timeframe. And last year, CEO Dan Price of Gravity Payments made headlines when he announced a minimum annual salary of $70,000 for workers at his business, and cut his own compensation by 90 percent.
With more young, socially conscientious individuals in the workforce and greater diversity in the executive suites, the trend away from traditional corporate structures and workplace dynamics will continue.
4. Growth of the “gig economy”, and friction with the old order
The phrase “gig economy” is largely a misnomer, since a lot of “gigs” are really short-term employment stints, often in the service sector. For example, a customer who commissions a driver through a ride-sharing service is effectively hiring both the motorist and the company to provide transportation. But because of the informality of “gigs”, the temporary employer typically needn’t pay a minimum wage, or cover expenses like health insurance, workers’ compensation, payroll taxes, or job training. As a result, “gig” workers’ labour costs can undersell those of their counterparts in established industries by a wide margin.
In many major cities, taxi companies and drivers are lobbying municipal governments to either nullify certain regulations on the taxi industry to enable taxis to “compete” with ride sharing, or outlaw ride sharing altogether. Either way, the consequences for customers could be significant. Last year, the California Labor Commission ruled that an Uber driver was an employee rather than a contractor, and thus was entitled to claim certain out-of-pocket expenses. If this ruling encompassed all such drivers, ride sharing could lose a big chunk of its cost-competitive edge.
The inherent conflict between traditional work and “gigs” is far from settled.
5. Opportunities in mobile services
Mobile technology has both greatly improved and become ubiquitous over the past decade, and accordingly, a healthy bottom line awaits companies that ride this wave successfully. A mobile-friendly web presence is more important than ever before, and businesses should strongly consider developing their own apps to facilitate access for customers with smartphones and tablets.