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Looking Ahead: Business In 2005 It seems all the hoopla of Y2K has hardly subsided-non-event that it turned out to be but already some pundits are looking ahead to what the early part of the 21st century might hold in store for us. Recently, Deloitte & Touche LLP released the results of its National Millennium Survey, which purports to tell us what business might look like in the year 2005. Deloitte & Touche hired noted market research firm Yankelovich Partners to conduct the survey, which focuses on the outlook for the near-future business environment, high- priority issues for business leaders, and what they expect to be the key challenges business will face. "The findings in this survey reveal that senior executives believe today's significant issues- technology, globalization, competition and human resources- will continue to dominate the business scene," says a spokesman for Deloitte & Touche. "Two of those issues, technology and globalization, represent both the dominant challenges and the important opportunities, now and in the future." According to the survey results, business leaders expect telecommunications and information technologies to have a greater impact on their business. Many believe that: * The Internet will become the major technology that drives business forward. * Asia will be a leader in the global economy and the source of most new jobs. * The industries experiencing the greatest change will be technology, telecommunications and -financial services.
Technology was cited as top-of mind by three out of five executives as the major difference in their companies between now and the beginning of 2005. One in five also mentioned it as one of the key challenges they will face at that time. Among general business issues expected to be more of a challenge in 2005, 79% of those surveyed mentioned protecting information systems from external intrusion, 78% cited keeping up with technological advances, and 64% singled out handling business information overflow. While 19% of business leaders expect globalization to be one of the key challenges they will face in 2005, 84% predict that international trade will be of the highest priority for the federal government. Seventy-four percent expect international competition to be one of their most challenging issues, and 63% feel that way about protecting intellectual capital. Among the most challenging human resources issues business leaders believe they will face five years from now are hiring and retaining qualified front-line workers, mentioned by 69%, and hiring and retaining qualified executives, a concern for 61%. Asked what they expect the major differences to be when they arrive for work on the morning of January 3, 2005, 61% said the positive impact of technology, 18% said a larger company, and 17% said a greater international orientation for their company. Among the key challenges they expect to be facing on that date are increased competition, a concern for 22%; technological challenges, 21%; becoming a global competitor, 19%; and attracting and retaining qualified staff, 18%. Almost 80% of survey respondents expect protecting information systems from external intrusion to be more of a challenge in 2005 than it is now. Seventy-eight percent feel the same way about keeping up with technological advances, 74% about international competition, and 71% about adapting to rapid market changes. Some of the comments survey respondents offered provide a keen insight into what they see in their future five years out: * "We'll be much bigger. I'll have devices I can't even imagine on my desk to communicate with all our executives in 100 countries." * "The majority of our customers will be online with us to do almost all of their banking from home." * "The economic landscape will be the major difference. It will be more globally oriented, meaning more foreign competition." * "There will be less corporate staff at headquarters due to technology, mechanized transactions and communications within the company and to customers. Perhaps we will be working at home."
* "Finding and retaining quality people at all levels and managing information will be key challenges." * "We'll be retraining our employees and retooling the company." When it comes to what the work environment will be like in 2005, the consensus is that the traditional work week will be essentially unchanged, although about half those interviewed believe that employees will retire later than they do now. Improved health and longer life spans, combined with access to technology such as personal computers, Internet connections and voice mail, will allow workers to continue working past today's retirement age. However, the surging stock market in the last two decades has resulted in large increases in retirement savings, giving many middle-aged workers the financial means to leave the workforce well before standard retirement age. Among the specific findings of this portion of the survey: * Respondents predict that the standard work week will be 4.9% days in 2005. * Fifty-one percent of respondents forecast later retirement for employees in 2005, while 38% say retirement will come earlier than it does now. * Respondents in the largest companies.and those in the financial industry predict earlier retirement (44%). Half of the senior executives interviewed for this survey believe that in 2005 compensation for the chief executive officers of companies will be substantially or somewhat higher than it is now. Those involved in the financial and retail/wholesale industries are more prone to expect compensation increases than those in the manufacturing and service industries. Many American industries are undergoing rapid change- and, in some cases, even upheaval based on consolidation, strong growth, deregulation and other activities. However, few industries are experiencing more rapid change than those affected by digital convergence and the multiplying interrelationships between computers, telecommunications, consumer electronics, information services and other high-technology industries, according to the survey participants. In terms of job creation, a majority of those polled believe that new jobs will come mostly from small businesses in the year 2005. More than half of those surveyed-54%- predict that small companies will generate the most jobs by early in the next century, while 26% say more jobs will come from medium-sized companies. Only 15% see large companies as the job creators of the future. About 80% of all respondents predict,an increase in their company's use of outside expertise by the year 2005. More than three quarters (77%) of the executives interviewed say their companies now retain outside expertise for at least one business function. More companies are relying on external providers to augment or supplant internal functions, and based on survey responses, the trend seems likely to continue.
Business leaders believe that by 2005 they will rely on technology to receive and transmit important business news. The work environment is becoming increasingly dependent on the electronic transmission of information. With the proliferation of personal computers at work and at home and the spread of online information sources via the Internet, executives can receive updated, customized business information at any time and in any place. Nine out of 10 respondents (91 %) say that the Internet will be the source of the majority of important business news early in the next century. Other technology-based sources include corporate intranets, mentioned by 80%, and e-mail, mentioned by 74%. Almost two-thirds (64%) predict they will still use personal meetings as a way to receive important business news. Sixty percent expect video conferencing to emerge as an important source of information in 2005.
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