Six Critical Issues for Business Leaders in 2023

January 17, 2023

The GET selected six topics from our Emerging Critical Issues Moment that CEOs need to plan for in the coming year.

Regular listeners of The GET will know that at the close of each podcast we ask our guests to identify in one word or phrase, an emerging issue they see on the horizon that business leaders need to put on their radar. We call this our Emerging Critical Issues Moment.

For our first episode of the New Year, we selected six issues cited by our guests and asked them to spend more time with us to dig a little deeper into the reasons why these topics are on their radar and what CEOs need to consider and plan for. Of more than a dozen issues cited during the first year of The GET, we selected–energy transition, decentralized finance, economic decoupling, algorithmic safety, identity, and regional trading bloc headquarters—as the challenges business leaders will face in the months ahead. For the full episode, and a more detailed discussion, you can find the latest podcast here.

Energy transition: Michael Spence, Nobel Laureate, former Dean, Stanford School of Business

We’re at the point where CEOs really need to think about preparing an energy transition plan. Corporate leaders need to do two things: One, plan for their own company’s energy transition, thinking carefully about energy efficiency, the way operations are configured, and the options are for reducing the company’s carbon footprint, among others. Second, climate change is now a major economic event that can hit with unexpected frequency and severity. In a world in which you can expect random but significant disruptions of logistics, CEOs must start thinking about things like insurance, resilience of operations, and so on.

Decentralized finance (DeFi): David Kappos, partner at Cravath, Swaine & Moore and former Director of the U.S. Patent and Trademark Office

Decentralized Finance or DeFi, is simply access to capital without a centralized operator. In traditional finance systems you’re dealing with intermediaries such as brokerages, exchanges, or banks to whom we grant some measure of trust. DeFi offers financial instruments without relying on those intermediaries by using a smart contract on a decentralized blockchain like Ethereum, running just like any other software. The promises that are made are enforced by the blockchain that the smart contract is running on rather than the law. The benefit of DeFi is it reduces the cost of access to capital.

The case regional trading bloc headquarters: Victor Fung, Chairman of the Fung Group, and the Asia Global Institute

We are witnessing the emergence of a new multilateral system of regional trading blocs. As these blocs establish mature, CEOs should consider setting up headquarters location in each bloc to be closer to the consumer. As supply chains become more fluid there is a need for fast response, and to do much lower minimum order quantities therefore a need to be closer to the market.

Economic decoupling: Sam Palmisano, Chairman of the Center for Global Enterprise, and the America’s Frontier Fund

As data increasingly becomes the engine that propels organizations, business leaders need to understand–and be prepared for–how segmenting of the global economy, or economic decoupling, could affect the ability of their business to collect, protect, analyze, and implement insights from the data they collect. Economic decoupling could mean new barriers to the transfer of data. CEOs should have a plan to design for a world where you are segmenting the information from where you operate.

Algorithmic safety: Jon Iwata, Executive Fellow at Yale School of Management and Managing Director of the Data and Trust Alliance

Algorithms are formulas or rules to determine how outcomes are factored by computers. They are not new, but what’s different today is the use of artificial intelligence and machine learning. Algorithms learn based on data that is input and therefore, the quality of the data is important because it will affect the recommendations produced by the algorithm. Think of data as raw material, the algorithms as what happens with that raw material. With an increasing number of applications designed to help people make a better decision–who to hire, extend credit, make a recommendation, etc.—algorithmic safety is an important issue.

Identity: Alexander Fernandez, CEO of Streamline Media Group

As organizations build their own Metaverse and they get enamored with all the endless possibilities of interactivity, gameplay, design, effective interactions, there may be a tendency to want to do everything. But business leaders need to remember that there’s also the ability for young children, and really anyone, to join. It’s important for organizations, and it’s just good data hygiene, to really understand who is interacting with your system. Understanding who is on that system, what they have access to, is why identity is so key to any type of adventure in the Metaverse.

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