Saying that our world is changing rapidly is like saying nothing. But in an era of accelerating technological advancements, fast-paced social transformation and geopolitical turmoil, it’s harder than ever to predict what the future has in store. Nevertheless, making accurate forecasts is necessary, especially in business settings.
This article briefly goes over the events and circumstances that influenced business in the U.S. and Europe the most last year. Based on that and our own research, we’ll discuss five business trends for 2023.
What happened in 2022?
Before we begin talking about business trends for 2023, let’s have a look at a few important things that happened this year.
Global inflation surge
Since mid-2021, we’ve seen a global inflation surge, with prices rising the most in Europe, Brazil, Turkey and the United States. Economists couldn’t agree on whether this was a transitory crisis or would it be persistent. It’s probably safe to say that inflation will reach more normal levels once some or all of its causes are resolved, although we did see a slight decrease towards the end of the year.
For reference, have a look at the chart below that compares the inflation levels in Europe and the U.S. this year. The stats are based on data found on the U.S. Inflation Calculator and Trading Economics websites.
The direct causes include the following:
- the fiscal and monetary stimulus provided by governments during lockdowns
- disruptions in the supply chain, especially energy and electronic chip shortages
- the war in Ukraine that affected the prices of food and many resources
- increased global consumption and demand
Recovery from the pandemic lockdowns
Nobody needs to be reminded how badly the pandemic and its consequences affected businesses worldwide. The economic recession has caused many industries to suffer reduced revenues and layoffs. It has also caused a massive disruption in global supply chains, leading to shortages of necessary goods and materials for businesses. Although restrictions were lifted in early 2022, recovery will take some time.
War in Ukraine
On the 24th of February, the unthinkable happened. Dozens of Russian missiles pounded Ukrainian soil as far West as Lviv. Following them, 120-125 battalion-size battlegroups supported by artillery and armored units invaded the country (according to Illia Ponomarenko, a reporter from the Kyiv Independent). Russian tanks and infantry poured into Ukraine but were, fortunately, stopped and pushed back in the following weeks.
The war has proved to have a particularly bloody and brutal nature. Thousands of soldiers and civilians have lost their lives, many more are left with trauma. Moreover, Ukraine’s cities, towns, economy and infrastructure are either heavily damaged or completely ruined.
This puts gigantic pressure on the Western world. NATO countries have been providing massive military and civilian aid, including financial support, to the government in Kiyv. It’s the right thing to do, no doubt. But it does weigh down on the economies of the countries involved.
But what’s arguably even worse, the war has had a terrible impact on the global economy and supply chains. Before the invasion, Ukraine was one of the largest exporters of grain and fertilizers. Now, with their economy shrinking to less than half of what it used to be, food prices are rising.
What’s more, Europe has been buying most raw materials like gas and crude oil from Russia. Due to sanctions, imports are currently minimal. This increased the price of many critical resources exponentially. For example, European countries had to pay 700% more for natural gas in July 2022 compared to the previous year.
The NFT bubble
The non-fungible token (NFT) market has seen an unprecedented boom in prices and interest in 2022. NFTs are digital assets, typically associated with art, in-game items, and other digital collectibles, that are stored on a blockchain and are verifiably owned by a single individual.
NFTs have been becoming increasingly popular due to their ability to be bought and sold easily, with some individual pieces fetching high prices. In February 2021, an NFT of digital artwork by Beeple sold for $69.3 million, making it the third-most expensive piece of art ever sold.
This surge in interest has led some to wonder if the NFT market is in a bubble. A bubble occurs when prices rise quickly and are not supported by underlying fundamentals, leading to a sharp decline in prices when the bubble bursts.
Unfortunately for people who invested money in NFTs, the current market was indeed a bubble. The average price of NFT sales plummeted abruptly in May 2022, according to Investment Monitor. On the 1st of May, it was calculated at 3894 USD, when it started dropping to hit 784 USD in just three weeks! And that value continued to drop in the following months, although at a slower pace.
The cryptocurrency crash
The general consensus is, of course, that most cryptocurrencies are quite unstable and investing in them is risky. Projects like the DogeCoin obviously had only speculative value and were bound to be highly unstable. But even major players like Bitcoin and Ethereum are obviously very unstable despite their large amount of users and miners and their respective networks being around for several years.
Just like many times before, the value of cryptocurrencies, including Bitcoin and Ethereum, nosedived in May of 2022 before they even managed to fully recover from the last drop in 2021. One more tumble happened in November 2022 due to the collapse of FTX, one of the biggest crypto trading platforms.
Business predictions for 2023
Now let’s have a look at a few business trends for 2023.
Increased employee expectations
Employee expectations have increased in the past few years due to the competitive job market, technological advancements, and changing workplace culture. And people’s mentality is changing. Employees expect a healthy life-work balance, where they aren’t required to stay long hours in the office at the expense of their private lives.
The pandemic also played a role, as it made remote work a standard. This arguably forced many improvements in the workplace. Employers are also expected to provide a safe and healthy work environment, competitive compensation and benefits, and career development opportunities.
Additionally, employees want a flexible work environment where innovation and creativity are properly rewarded. Some companies and countries are experimenting with a four-day work week too. We can’t be 100% sure the idea will catch on, and even if it does, it’ll probably take more than a year for it to become a mainstream reality. Nevertheless, it’s worth remembering as a possible future of the workplace.
As a company specializing in Extended Reality (XR) solutions, we believe that we have something to offer in the matter of meeting employees’ expectations. First of all, we craft effective and innovative training solutions. We also help companies in creating one-of-a-kind onboarding experiences. Finally, we recommend reading our blog entry about the role immersive technologies play in attracting and retaining talented employees.
Increased customer expectations
A tight, free-market competition between businesses leads to constant innovations to provide the best customer experience. When paired with the rapid advancement of technology, we see very dynamic and significant improvements in the way businesses approach their customers and communicate with them. This brings us to the second of our business trends for 2023 – increased customer expectations.
Judging by the current trends, consumers will expect more personalized experiences, faster delivery times, more features, and more value. Companies will need to focus on providing better customer service, developing innovative products and services, and leveraging data and analytics. Social responsibility and ethical practices will also be important.
Brands will focus on building communities and relationships. Creating meaningful connections with customers helps better understand their needs and interests and fosters loyalty. It’s always better to retain happy customers that drive sales by returning and recommending the brand to friends than to acquire new ones.
Finally, building relationships and communities can also create opportunities for customers to provide feedback and suggestions, which can help brands to innovate and improve their products and services.
One more thing to keep in mind is that more and more people, especially generation Z, enjoy augmented reality experiences. Utilizing AR in your marketing and sales activities will bring a potential increase in the number of customers and the value of revenue.
If you’d like to find out how 4Experience can help you in creating the best CX on the market with modern technology, check out our offer.
Inflation is dropping but is relatively high
Judging by the current trends and pressure factors around the world, we can expect inflation to drop steadily but remain still relatively high throughout most of 2023. Notice the trend in the graph below. With prices still rising, although, at a slower rate than before, many companies may still be on the lookout for savings.
On the other hand, if you’re in a position to make investments and grow your company, you might as well do it now. After all, prices will still be rising in the following year. Anyway, unless some unexpected circumstances occur, we can be sure that inflation will reach lower values than this year.
Digital transformation and web 3.0
The internet is changing, and with it, the way we go about our daily lives. Concepts like decentralization, as well as users owning and building virtual spaces, are gaining importance. We already see more and more applications that use AR, and our online presence is generally turning from text and pictures into a 3D experience.
This is a trend bound to stick around in 2023. We are hesitant to say that a revolution will take place, but the rapid evolution we’re seeing right now surely won’t lose its pace. You can expect heavy use of AI and machine learning too. Both for a deeper level of personalization on the internet, as well as for creating more AI-generated content.
Something that might surprise you is that NFTs and cryptocurrencies most likely won’t die out, despite the crashes they experienced and will experience. Regardless of the bubble people created around the former, NFTs are a great way to sell in-game assets and can include smart contracts, which open up lots of opportunities for projects like metaverse stores. All in all, blockchain is a great technology. It’s just not used in an effective way yet.
If we’re talking about the transformation of the internet, we have to mention metaverses. Although the metaverse isn’t where its propagators would like it to be, we still believe it’s slowly becoming more of a reality. With advancements in fields such as virtual reality and haptics, more and more people will want to join it.
If you have a metaverse project in mind or would like to learn more about metaverse business opportunities, read our latest article.
Pressure to go green
The fifth and final of our business trends for 2023 is the pressure to go green. We can already see that customers are increasingly expecting companies to operate in a sustainable and environmentally conscious manner. Employees are also looking for employers who take sustainability into account when making decisions. Finally, regulators are pushing companies to reduce their environmental footprints.
So companies should not only go green to help save the planet, and at the same time gain more loyal customers, they will have to do it as more legal obligations appear. This can be a challenging process. But one in which XR technologies can help too. How?
For example, by facilitating remote work, decreasing their carbon footprint and educating their employees and customers. To learn more, read our article on why businesses should go green and how XR can help.
Gain a competitive advantage in 2023 with XR technology
We believe the predictions and business trends for 2023 presented in this article are a pretty accurate image of what you can expect. We’re also positive that XR technology is a powerful tool that can help you meet the expectations of your employees, partners and clients in this exciting time.
By leveraging this technology, businesses can create a more engaging, personalized, and sustainable customer experience while also reducing their environmental impact. XR technology is a great way to increase efficiency, improve customer & employee satisfaction, and stay ahead of the competition in 2023.
If you’d like to learn more and talk to one of our experts, drop us a line. We’ll get back to you in a few hours to schedule a free 60-minute consultation. No hidden conditions.
The author generated this text about business trends for 2023 in part with GPT-3, OpenAI’s large-scale language-generation model. Upon generating draft language, the author reviewed, edited, and revised the language to their own liking and takes ultimate responsibility for the content of this publication.