It is around this time that we usually think of the new year, imagine how it will look like, plan for what we need to do, set some expectations, get energized, and be positive about the prospects of a fresh start. So, what will 2024 bring to the world? Will it be another year marred with uncertainties? Can we have an enjoyable, prosperous, and peaceful year? Can 2024 be the beginning of a period of global stability and prosperity? The answer is yes, but this will never happen by just hoping and wishing; we need to collectively do what it takes to make that happen.
In 2024, the world will get closer to the halfway mark of the third decade of the 21st century. Since the beginning of 2020, we have lived through eventful times with so many disruptions that we surely could have been better off without. As a consequence, one of the global trends that will be on the rise in 2024 is that people will be more health-conscious and interested in physical and mental well-being. Therefore, it would be invaluable to act with empathy and compassion to help people navigate challenging times.
Heraclitus said over 2500 years ago: “The only constant in life is change.” Today, the world is still constantly changing, affecting lives and livelihoods, economies, societies, and the future of humanity as we know it. These changes include global conflicts, regional wars, economic turbulences, high inflation, geopolitical tensions, migration, climate change, and the growing role of innovative technologies in our lives. The one thing that we can confidently predict is that these changes are here to stay and will continue to reshape societies around the world. The question is how they will affect us, and how are we going to adapt? Are we ready to accommodate a regularly fast-changing, dynamic, and interconnected global environment?
What is the global economic outlook for 2024? Projections indicate that there will be a modest growth of 2.7% compared to 2.9% in 2023, caused by geopolitical conflicts, tighter monetary conditions, slower trade growth, value chain disruptions, and weaker business and consumer confidence in global economies coupled with governments opting to reduce spending on public services and utilities, in addition to job cuts. There will be variations between regions and economies, with advanced economies falling short of their potential and witnessing slower growth compared to emerging markets. Economies in North America and Asia are expected to do better than European economies, which will be affected by high-interest rates––although they might fall a bit––and high energy costs due to the expected increase in gas prices. Emerging economies––such as Brazil, Turkey, Mexico, and India––are expected to grow. Africa––boosted by its services sector––will be the second-fastest-growing region, but political instability will remain a challenge. Asia is expected to account for 60% of the global GDP growth, and its green energy industry will be one of the positive signs of the year. As for the circular economy, it is expected to continue growing to help minimize waste amid increasing concerns about sustainability and the environment.
What do transformative technologies have in store for 2024? The acceleration of innovative technologies such as Artificial intelligence (AI), especially Generative AI (GenAI), will continue to penetrate and impact our lives and will probably be the catalyst for societal transformation and economic growth. The question that keeps popping up is, will it help make our lives better? What do we need to know to deal with it? Will it make humans redundant? Will machines replace humans at work? Some people firmly believe so and that it is only a matter of time before robots replace people. Well, I beg to differ. What I do think is that people will be replaced by an augmented and more skilled workforce, not by machines. GenAI will help people be more productive, efficient, and faster in what they do. I think 2024 will be the year when we start understanding how transformative GenAI can be. However, it all depends on the readiness of society to adopt these innovative technologies, the accuracy of the data employed––which is the key driver of the AI engine––and how machines are equipped and trained to analyze and use data to produce timely indicators, make predictions, and support informed decision-making.
As with any newly introduced technology, the use of AI is both promising and threatening such as causing a lot of uncertainty, lack of trust, privacy issues, fear of the unknown, the risk of security management, and data theft, in addition to the growth in cybercrime, which is perceived to be around $6 trillion annually and growing. Therefore, adopting a proactive approach to mitigate the associated risks of AI-enabled cybercrime requires the formulation of thorough AI policies and a legal and regulatory framework. In my view, AI, like every innovation, will depend on what we make out of it. For now, no one really knows what the end game is; it is still early days, and we are all learning on the go.
In 2024, the world will get closer to the democratization of AI, becoming more accessible to individuals and organizations, given the diffusion of more pervasive cloud-based AI platforms and applications coupled with emerging technologies that will drive the growth of the cloud landscape, resulting in further innovation, efficiency, and value creation. According to Gartner, the global public cloud services market is expected to grow from $364 billion in 2022 to $501 billion in 2024.
AI will supercharge the productivity of consumers depending on infrastructure availability, affordability, and level of adoption, bringing a true paradigm shift in creativity, content creation, and organizational dynamics and enabling businesses to automate tasks, make data-driven decisions, and personalize customer experience. On this note, further research is needed to guide and help prioritize smarter investments in AI with the objective of building and protecting agile, adaptive, resilient, and competitive organizations while generating value for society. Also, next year, the world will see the growth of immersive internet, creating blended environments where the barriers between the physical and the digital worlds are blurred and become increasingly common, with the number of global users increasing to around 400 million people. Immersive internet will transform our online experience, enticing more interaction and collaboration across different industries, from manufacturing, logistics, and healthcare to education, entertainment, and smart cities, coupled with the dissemination of spatial computing, such as the metaverse.
In politics, 2024 is the year when all corners of the world will vote. It is one of the largest combined leadership, government, and parliament electorates in history. There will be more than 70 elections in countries that are home to around 41% of the world’s population and 42% of its GDP, with some being more significant or unpredictable than others, including the United States, the European Union, India, Indonesia, Taiwan, the United Kingdom, and Russia among others with many global implications in play. What the outcome will be remains to be seen, given the growing polarization in societies. However, it will surely result in a sea of socioeconomic and political changes. As a result of all these elections, what dynamics will likely determine the geopolitical directions in the next decade? How far will populism go? What would be the influence of BRICS following its membership expansion? How will emerging economies with multiple alignments prioritize their alliances? What will be the implications on immigration policies and directions? Is a new world order in the making? Probably, but even if not completely configured in 2024, it will not be too long before it sees the light.
In climate, the United Arab Emirates hosted COP28 in 2023, witnessing further pledges to help act diligently to minimize the effects of climate change and promises of a real push for greener economies and a concrete action plan for decarbonization. The main highlight of COP28 was signing the agreement that signals the beginning of the end of fossil fuel by setting the stage for a swift, just, and equitable transition, supported by plans of deep emissions cuts and scaled-up financial resources. However, some questions remain unanswered: Is the issue of climate becoming more politicized than ever? How far the leading industrial countries––who in many ways are the cause of where the planet is today––are willing to make the required changes and take the much-anticipated tough decisions to avoid more climate-related disasters?
Global value chains which were greatly affected during the pandemic, have, throughout the last couple of years, normalized but remain fragile and unstable. Near-shoring and onshoring, and revisiting existing value chains—as alternatives—have taken longer than expected to take center stage. However, we should see more of that in 2024, as the required infrastructure is still in the making.
With the growing influence of digitalization, what will the future of work look like? In 2024, although many organizations are implementing back-to-office policies, the hybrid working models will continue to grow, where people will spend less time in offices, opening the opportunity to benefit from a pool of global talent where competition will be fierce with no borders or boundaries. The adoption of hybrid models will require coping with people’s changing habits and massive investments in infrastructure. Moreover, the shift from focusing on output to outcome will grow. Besides, in 2024, organizations implementing hybrid working models will need to help people work effectively and efficiently as a team, albeit partially remotely.
For the Middle East and North Africa (MENA), after what seemed to be a gradual shift towards rapprochement and a focus on economic development, came a devastating war. According to the World Bank and the International Monetary Fund, economic growth is expected to be 3.4% in 2024, driven mainly by non-economic activities with varying discrepancies, inequalities, and prospects across the region with the Gulf Cooperation Council countries at one end of the spectrum and countries like Yemen and Syria on the other end with several countries facing a variety of socioeconomic and political challenges. The key issues to watch remain to be investing in lifelong learning, growing the tech-enabled entrepreneurial ecosystem, diversifying economies, leveraging cross-border trade and investments, and gradually transitioning to greener economies and the acceleration of digital transformation. On this note, the region is expected to spend $183 billion on digitalization, increasing by 4% compared to 2023. However, these projections are subject to the outcome of the ongoing war and the socioeconomic and political developments in the region. Accordingly, the question that poses itself is, can we see a calmer and more peaceful region? Can the world put an end to this never-ending humanitarian disaster? Can the suffering stop? Every life matters, regardless of nationality or religion; how can the world bring this 75-year-old conflict to an end? Every story has an end, and for this one, it is high time for a solution.
Egypt––one of the largest markets in Africa and the Middle East––is going through a tough economic period caused by a web of complex global shocks and local interconnected reasons. Inflation is at an all-time high, averaging 32%, with food price inflation reaching 70%, leading the population to feel that their living standards and spending power are declining. Multiple factors contributed to an external deficit, which in turn depleted the currency reserves and led to a foreign exchange crisis and a currency crunch. The back-to-back devaluations of the Egyptian pound spurred growth in tourism––a critical source of foreign exchange and employment––where the revenues increased by 26.8% to $13.6 billion in the fiscal year 2022/2023, compared to $10.7 billion in the fiscal year 2021/2022 and the number of tourists increased by 35.6% to around 13.9 million. However, the unrest in the region may impact tourism revenues, a vital source of Forex, and will undoubtedly slow the inflow of foreign direct and portfolio investments due to the increased uncertainty and risks.
In 2024 Egypt’s economic outlook is projected to grow by 3.6% in 2024, down from 4.2% in 2023. The economy will continue to be affected by existing global shocks and domestic economic imbalances. The government is expected to go full steam, pushing on all cylinders and taking steady steps to liberalize the economy, including a comprehensive structural reform program—which is not an option—while rationalizing and prioritizing investments that would create jobs, yield returns, and realize scalable and sustainable impact. This is the straightforward route to economic recovery in the short to medium term. The economic and business outlook for 2024 could look promising, pending some timely actions and overdue decisions, including improving the business environment, enhancing trade policy and facilitation, fostering competition, reducing red tape, combating corruption, and strengthening governance and the rule of law. Therefore, the government is expected to engage the private sector further and address their urgent needs by offering a more conducive, agile, inviting, transparent, and competitive business environment that can help them unleash their potential in higher value-added and export-oriented activities necessary for job-creation and improved living standards. The government should provide a level playing field for all stakeholders and act as the enabler and regulator. The prospects in Egypt are massive, and despite its long history that extends to more than 5000 years, the country is full of unlimited untapped potential. These issues are already on the government’s radar, and several ambitious projects are already underway. However, at this time and age and with the rate of change that societies are progressing, there is a need to up the pace of liberalizing the economy supported by sound and progressive economic policies with the private sector leading the charge.
For AUC, as the university enters its 105th year, 2024 will witness the next phase of its mega project: Campus 2026––the NextGen development project that reflects the university’s vision for the future. The project aims to enhance student and learner experience by incorporating cutting-edge innovative technologies, providing fully accessible facilities, and developing a sustainable culture and structures. The objective of Campus 2026 is to avail an ecosystem for innovation and further connect students and learners to the real world through partnerships with businesses and industry, catering to the future of work with its diverse models and contributing positively to sustainability and climate change. This ambitious endeavor encompasses three transformative projects currently known as the Technology, Research, and Innovation Lab, the Extended Education Hub, and the NextGen Student living and learning spaces.
For AUC School of Business, 2024 will mark the 15th anniversary since its founding, which was formerly known as the School of Business, Economics, and Communication since 1993. It is worth noting that the origins of the school date back to 1947 with the introduction of the first undergraduate degree in economics in Egypt. Next year will be another busy year as we edge closer to completing the jigsaw puzzle of our portfolio of academic degrees with the long-awaited doctorate degree. In addition, the school will continue the implementation of its 2022/2025 strategic plan with several exciting initiatives in curriculum development, student-centered learning experience, research, executive education, and community development in the domains of entrepreneurship, inclusive development, responsible business, and capacity building, among others.
On a more personal note, I am genuinely positive about 2024 and look forward to welcoming the new year full of optimism for an enjoyable, rewarding, and successful year.
I wish you, your family, and your loved ones a healthy, blessed, and prosperous 2024.
About the author: Sherif Kamel is a Professor of Management and Dean of the School of Business at The American University in Cairo.
30 December 2023
Issue #36
Happy New Year, Dear Sherif!
Wish I can share your optimism. Happy New Year.