The era of uncertainty
The world has entered an age of high uncertainty and some people talk about peak capitalism. Many of these uncertainties relate to the United Nation’s (UN) Sustainable Development Goals (SDGs). They include climate change and the COVID-19 pandemic, economic security, food-related issues, the widening gap between rich and poor, and a prolonged period of ultra-low interest rates.
Following the heightened global focus on SDGs, the Japanese government announced its Green Growth Strategy, accelerating its transition to carbon neutrality. In addition, Japan has become a forerunner on a number of social issues, including the arrival of a super-aging society with depopulation due to the declining birthrate and aging population, an increase in medical and nursing care costs, a shrinking market, shortages of human resources, a decline in international competitiveness due to the growth of emerging countries, food security (desire to move away from import dependency) and increased natural disasters. These social issues have a significant impact, and their interplay increases risks to society (see Figure 2). With remote working becoming the norm, talent acquisition in rural areas is increasing. Moreover, the hiring of foreign laborers and the use of robotic technology are accelerating to fill the labor shortage. In response, the promotion of digital transformation (DX) and the re-design of the workplace and evaluation systems are necessary. The digital changes in the workplace have made re-skilling a must. As businesses and society respond to these changes, diversity and complexity are increasing and it is becoming increasingly difficult for companies and individuals to find solutions on their own. A focus on diversity and inclusiveness (D&I) and identifying developing ecosystems becomes increasingly important.
On the other hand, as suggested in Stakeholder Capitalism of WEF*, Larry Fink’s letters and the Green Swan report, new concepts and ideas call for a new approach to capitalism. Managers facing these changes and social issues are forced to make difficult management decisions, and investors are anxious about the uncertainties of capital markets and society. We have entered an era in which companies, industries, and society need to transform with a longer-term perspective in mind (see Figure 2).