7 predictions for 2017

From a gig economy clampdown to a diversity boom.

by MT Staff
Last Updated: 04 Jan 2017

It's not easy predicting the future. Last year MT was far from the only publication to confidently suggest Britain would vote Remain in the forthcoming referendum. And who among us believed a reality TV star with no experience of high office would become leader of the free world? But for what it's worth, here's what we think is on the horizon for the year ahead. 

1. Hacking becomes normalised

If 2016 was the year when cybersecurity finally became a boardroom agenda point - thanks to high profile attacks on TalkTalk, Tesco Bank, Yahoo et al - then 2017 may be the year when the rest of us decide to get over it, shrugging our shoulders and simply accepting hacking as the inevitable corrollary to the convenience of modern life

In many ways it would be an entirely rational response: hardly a day goes by without the news of yet another big data breach somewhere around the world, and as all the available research shows most businesses have been hacked already. For the rest it is only a matter of time - the cost to UK businesses of being hacked is over £1bn a year and rising, according to national cyber crime reporting centre Action Fraud.

And yet despite the bad press and big fines handed out by regulators (a record £400,000 in the case of TalkTalk) this avalanche of data theft does very little to slow the pace at which punters eagerly sign up to new online services. Simply because the pull of convenience and novelty is much more immediate than distant fears about what might happen to those personal details somewhere down the line. The financial costs are picked up by the hacked company, and your data has probably already been stolen half a dozen times already, so why worry?

The truth about cybercrime is that - like most other kinds of white collar fraud - it is increasingly being seen as a cost of doing business. Without the vigorous efforts of the internet security industry lobbyists it would have faded into normality already.

2. Unpredictability

Is it cheating to predict unpredictability? Perhaps, but if 2016 has shown us anything it is that Samuel Goldwyn’s verdict on Hollywood - ‘Nobody knows anything’ - applies equally well in real life as it does to the movies.

If you’d put a £1 accumulator bet on Leicester City to win the Premiership, the Brexit vote and Donald Trump, POTUS, you could now be sitting on £4.5m, according to bookmaker William Hill. There aren’t many years when three such major events were surrounded by so much unpredictability and attracted such long odds.

And with more big elections coming in 2017 - in France and Germany to name but two - not to mention the rise and rise of disruptive tech and Artificial Intelligence coming to take all our jobs, it’s a trend that looks set to continue.

But some things don’t change - one of the hallmarks of a real leader has always been the ability to make good decisions even when furnished with only bad or incomplete information. That’s a skill that is going to be in increasingly high demand over the coming months and years.

3. Vladimir Putin becomes Time Man of the Year

After playing a blinder for twelve months Putin follows Donald Trump to become the US magazine’s Man of the Year for 2017. Revealing historic footage of the US President in a Moscow hotel room mysteriously becomes available via Wikileaks as Russian tanks roll unopposed over the border into Latvia following a popular uprising in the capital Riga protesting against EU membership and the prejudicial effects on ethnic Russians.

President Trump says it was the Latvians’ own fault for failing to build a wall to protect themselves and at the same time denies that the granting of planning permission for a new Trump hotel in Moscow had anything to do with it. The UK despatches two new warships to the Baltic but both break down en route.

Putin sends congratulations to Roman Abramovich as Chelsea FC win the Premier League title by a wide margin. Michael O’Leary, the CEO of Ryanair, protests when one of his 737s containing 76 British stag party goers is impounded by the Russian military at Riga airport - now renamed Joseph Stalin International.

4. Diversity will bloom in the boardroom

A friend of MT once lamented that her company’s idea of diversity was to make sure there was an ‘ethnic’ lesbian on every team. It’s perhaps equally depressing that it took the veiled threat of regulation to force Britain’s top listed companies to include more women on boards, something they did almost exclusively by filling NED roles.

Times – we hope – are changing. More and more boards are making inclusion a business objective, rather than a fluffy nice-to-have or a paranoid box-ticking exercise. Name-blind recruitment, CV-blind interviews, expanded apprenticeship schemes, and sponsorship and mentoring programmes are all surging in popularity.

This will accelerate next year, and it won’t be as a result of government pressure - if it’s not got ‘Brexit’ on the box, Theresa May et al aren’t interested. Instead, realising that the country’s standing as an attractive place for talented people to live and work is at risk, British business will step into the vacuum, doubling up their diversity efforts in 2017.

5. Executive pay: More hand-wringing, no action

How much are Britain’s top bosses worth? They currently earn lot less than many of their counterparts in the states (but then they are running smaller businesses in the main) but substantially more than CEOs on the continent. The High Pay Centre thinktank has labelled today  (January 4th) 'fat cat wednesday' - the point at which the average FTSE boss has already earned as much money as a typical worker will make in the whole of this year. 

It’s long been said that CEOs are paid too much and often rewarded for failure, but steps to tackle that have been slow at best. Perhaps 2017 could be the year all that changes? We do have a new prime minister in Downing Street who claims to be on the side of the many, not the few, on the side of Mr and Mrs Brexit against the wealthy elites.

But don’t bet your bonus on it. Theresa May will have her hands full for at least the next couple of years figuring out what on earth to do about Brexit. She has already watered down her previous proposal to give workers representation on boards and it looks as though plans for compulsory binding shareholder votes on pay could go the way of the dodo too.

6. A backlash for the ‘new economy’

The UK now has a record number of 4.8 million self-employed people. Flexibility is on the up with 90,000 individuals on zero hours contracts and 1.7 million in temporary work. But just when it looked as if we were all going to go freelance/portfolio career with our working lives the ‘gig economy’ looks under threat.

The Autumn court ruling against taxi app Uber, which successfully challenged the classification of their workers as self-employed in the UK, is going to accelerate HMRC investigations into those businesses that keep costs down by claiming their workers are self-employed. The catchily named special task force called the Employment Status and Intermediaries Team will seek to claw back unpaid National Insurance and other unpaid taxes.

And it’s not just changing employment conditions that are likely to grab the taxman’s attention. The so-called sharing economy, led by the accommodation marketplace Airbnb, among others, allows consumers to make money from their possessions (from parking spaces to poodles) when they’re not using them. An FT investigation published yesterday claimed a third of the saving Airbnb users make by avoiding conventional hotels is down to the tax advantages the platform enjoys. HM Treasury is unlikely to ignore such a discrepancy for long.

7. Every country for themselves

Protectionism is back in vogue. After two decades of near-consensus on globalisation, the western world is beginning to express real doubts about the way international trade works.

Across the pond Trump is threatening to ignite trade wars with China and Mexico. Closer to home Britain faces the troubling prospect of a ‘hard Brexit’, abandoning not just its membership of the EU but also its favourable access to the single market, upon which its economy currently relies. Touted deals with emerging markets and the likes of the US and Australia will struggle to take up the slack, in the short term at least.

Don’t expect the rest of the world to take this new bout of economic nationalism lying down. Having followed the US and its allies into an era of free trade, many countries will start erecting their own barriers in response to Trump’s. It won’t be surprising to see greater calls for government intervention in industry and the blocking of international takeovers.

It’s a dangerous path to walk. Trade barriers invariably harm the interests of consumers while propping up inefficient old industries and depriving new ones of vital investment. We can only hope that Trump’s deeds fail to match his words, and that Theresa May’s ‘Red, White and Blue Brexit’ falls on the softer end of the spectrum.

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