5 Global Business Trends to Keep an eye on in 2023

After the unparalleled beginnings of 2020, 2022 has been an eventful year for start-ups across the globe — a roller coaster of highs and lows.

Tech companies continued to overshadow their non-tech counterparts, growing 2.3x since the pandemic. The Russia-Ukraine war hit the global economy with supply chain disruptions and rising raw materials prices. Global venture funding saw a pronounced pullback, with Q3 down by 53% YOY, while North America maintained its money-magnetic charm, attracting 52.3% of global start-up funding. 

The world witnessed talent undergoing collective enlightenment post-pandemic, birthing the Great Resignation. The US, UK, Israel and Canada grabbed the Top 4 spots in the Global Startup Ecosystem Index. And over 900 Unicorns were recognized around the world, with ecosystems like Ho Chi Minh City, Brisbane, Luxembourg, and Santiago-Valparaiso achieving their first. 

As the aftermath of the pandemic settles, the start-up ecosystem rings in 2023 with a mixed bag of market correction, accelerated tech growth, mindfulness, and long-awaited progress in sustainability that can change the face of our future. 
Here are our selections of 5 global business trends that you should keep an eye on in 2023:

1. Transformational Tech Adoption Speeds Up

These are some common tech themes in business that are touted to show dramatic adoption rates this year:

E-commerce: Businesses around the world will maximize their digital retail presence. Shopify reported that it saw 10 years worth of growth in just 3 months during the pandemic. This year, e-commerce is projected to be responsible for 22% of all retail sales. Businesses, big or small, have seen monumental growth by focussing their energies on digital. 

For example, Disney closed 60 brick-and-mortar stores and announced an in-app commerce store. After their announcement, the search volume for ‘Disney’ went up by 5500%. Most millennials reportedly shop online, reinforcing the consumer’s desire for simplicity, immediacy, and convenience.

80% of millennials reportedly shop online, forbes global business trends

Although Social Commerce was on the fast track in 2022, the end of the year came with a disappointing rollback and scale-down of social shopping features by platforms like Facebook, Instagram and Tiktok. However, the creator economy and digital ads will continue to thrive and be the face of social commerce for now, as Hootesuite reminds us that internet users aged 16 to 64 visit social networks more than they visit search engines or web portals.

AI & BD: Much like Optimus – the humanoid, 2023 will wave in a year of mass adoption of AI-driven tech. Even though humans have been dreaming about mass AI adoption since the first industrial revolution, we can all agree it’s been a protracted dream. 

AI is more than just Robotics today. Natural Language Generation, Speech Recognition, Virtual Agents, Decision Management tools, Biometrics, Machine Learning, Peer-to-Peer networks, Deep Learning, & AI-optimized hardware will all share center stage in development and business adoption this year. 

IBM’s Global AI Adoption Index of 2022 reveals the rapidly advancing adoption rates, with 35% of global businesses already using AI in their operations, with an additional 42% saying they are exploring AI. Businesses are most commonly using AI for the following: automating IT, improving business or network processes by cost savings and efficiencies, improvements in IT or network performance, and better experiences for customers.

In its myriad applications, AI overlaps with almost every start-up industry. Industries like Advanced Manufacturing, PropTech, AgTech, HealthTech, and CleanTech will actively adopt AI to further their cause. 

The Global Startup Ecosystem Report of 2022 revealed that around 25% of all sector-agnostic tech deals had AI in common. AI & Big Data’s 5-year growth rates were 51% in Series A deal count and 104% in exit count, making it one of the sub-sectors with the highest growth. As of 26th Aug 2022, Statista reported that 5% of the world’s VC-funded start-ups were in AI.

Virtual Reality & Augmented Reality: Immersive technologies will continue to be a point of interest this year, with AR, VR and MR expanding the horizon of possibilities. Search interest for ‘immersive technology’ has increased by 373% since 2018. Like AI, VR/AR/MR can be applied to any industry, from Retail to Navigation, Healthcare, Automotives or Manufacturing. 

Google Maps launched Live View, which overlays location directions in real time on top of our world. Pinterest launched AR capabilities on their app, where users ‘Try On’ home decor from their phones. The CES 2023 in Las Vegas was teeming with astonishing, immersive technology, from the FlipVR controller by Shiftall – a microphone that straps onto your mouth and turns your screaming voice into a whisper, to TCL’s RayNeoX2 AR glasses that can deliver 8K video quality, navigation and text translation services. 

In a NielsonIQ survey, 51% said they would be willing to use AR/VR technology to assess products. Harvard Business Review studied the usage of AR for a beauty and cosmetics brand and found that 50% more shoppers spent time sampling lipsticks using AR. The study also concluded that AR/VR experiences have 3 key use cases: entertainment, education and evaluation. 

Businesses would benefit enormously by investigating immersive tech synergies for their plans this year. Ash Jhaveri, VP of Reality Labs Partnerships, Meta, spoke to Forbes and guaranteed that ‘every enterprise has at least one if not five or ten things that could actually be much better if they were in 3D.’

2. The Future of Work spells Hybrid Flexibility & Quiet Hiring

The Great Resignation and Quiet Quitting are getting replaced by Hybrid Flexibility and Quiet Hiring this year. ‘Hybrid Flexibility’ promotes flexible work environments, and ‘Quiet Hiring’ ushers in a push for the plug-and-play gig economy.

The Great Resignation and Quiet Quitting were emblematic of 2022, and their impact cannot be underplayed on the future of work. Employers were forced to rethink and restrategize employee wellness to retain talent. Businesses are finally under pressure to create environments that align with the values of the talent they want to attract. 

global business trends 2023 quote by Noah Wies, Slack

This led to a shift towards ‘Hybrid Flexibility’ – creating work environments with flexible hours, remote work options, and emphasis on mental wellness and work-life balance. Noah Wies, Chief Product Officer, Slack, was quoted saying that this will be the year teams will ‘work together effectively, no matter where we are or when we’re working’. Cynthia Stoddard, SVP and CIO of Adobe, called digital ‘the default.’ 

Despite employers reacting with encouragement and very little pushback, the end of 2022 also witnessed mass layoffs worldwide as a precautionary response triggered by economic uncertainty. This created a way for the age of Quiet Hiring. 

HR leaders will be instructed to keep full-time headcount low this year due to the looming macro trends, which means businesses will get more comfortable with the plug-and-play gig economy and increase investment in internal talent upskill and mobility.

3. Sustainability driven by more than just Consumer Demand

A global NeilsonIQ survey published on Nov 22 revealed that 81% of consumers are likely to choose a retailer that incentivizes or rewards sustainable choices, and 79% are likely to choose a retailer if they offered a wider assortment of sustainable options in their stores. In any other context, these would be explosive statistics, but in the 21st century, the steady drumbeat of consumer demand for sustainability is an overly familiar sound. 

The last few years have seen energy prices ballooning, the rising cost of goods, crop failures, and supply chain disruptions that can be directly connected to changing climate and extreme weather events. This has finally led governments and industries to sit up and take notice. 

The US launched the Net-Zero Government Initiative at the 2022 United Nations Climate Change Conference of the Parties (COP27), inviting governments to achieve net zero emissions by 2050. Countries like Australia, Canada, France, Germany, Japan, Singapore, and the United Kingdom have joined the mission. 

Governments have proactively started implementing their action plans in many ways; France’s new law for new commercial buildings makes it mandatory for roofs to be partially covered by plants and solar panels. Canada is incentivizing CleanTech by offering a 30% critical mineral exploration tax credit for the exploration of copper, nickel, cobalt and uranium. Starting in April 2022, the UK implemented a Plastic Packaging tax levied on finished plastic packaging components comprising less than 30% recycled plastic. 

Businesses are also looking beyond their four walls and inspecting supply chains in their entirety. Google uses A.I. technology to manage its power consumption at its data centers. Amazon is using Machine Learning to determine products fit for flexible packaging, making them lighter. They claim they have reduced the use of corrugated boxes by 35% in North America and Europe by using these algorithms. 

The Green Prop Tech industry, where real estate, tech, and sustainability intersect, is also expected to be highly sought after this year. Canadian green proptech companies have $1.5B in funding in the last 17 years and show no signs of slowing down.

4. Start-ups Race Beyond Borders

Once disruptors, now the convention. Start-ups we have seen emerge and grow at unstoppable speeds will continue to expand their horizons across geographical boundaries. Business Models that have proven to be successes in one part of the world will race to enter markets across the map.

In the food delivery space, Uber Eats operates in 45 countries, Grubhub in 25, and DoorDash in 27. But before 2022, DoorDash, a New York-based food delivery tech company, was operational only in 4 countries. After it acquired Wolt, a Helsinki-based food and grocery delivery platform, DoorDash expanded operations to 27 countries, including the Baltic and Scandinavian regions. Interestingly, a Spanish start-up Glovo, also a last-mile delivery start-up, raised $1.2B in funding to expand across South America and North Africa after their success in Europe. The competition for global market share will remain fierce in many VC-funded industries.

5. VC Funding goes Back to Basics, and Alternate Financing finds its spotlight

2021 was a triumphant year for funding around the world with astonishing record deals, but then came 2022. According to Crunchbase, VC funding went down by $90 billion (53%) YOY and $40 billion (33%) QOQ in 2022. This slump, unfortunately, carries some aftermath with it into 2023. 

Profitability will be the singular reality check investors will drill down this year. The ‘hockey stick’ uptick is no longer one that instills confidence. However, this does not mean that VCs are pulling back from the start-up world entirely; it just means that they will be much more selective. 

Invoking hope for start-up ecosystems outside the US, VC firms are actively venturing into new markets, away from the traditional Silicon Valley and New York City bubbles.

Businesses in the sustainability and social impact sector will have extra pull this year as VCs also look to align their value systems with their investments. Other sectors, like big data and analytics, will also continue to attract interest because of the sheer scope of the market. 

But financing is evolving in its own right, and VCs are no longer the end-all to get on the fast track. Forbes predicts that in 2023 Equity Crowdfunding will emerge as a popular financing trend and the proof is in the pudding. More than 50% of crowdfunding campaigns are achieving success, and over 78% of campaigns succeed in raising more than their goal! 

Similarly, Revenue Based Financing is also set to gain momentum this year. Given the looming macro trends, its flexibility for entrepreneurs and investors makes it an attractive solution.

2023 is gleaming with innovation in tech, financing and business growth. Businesses embrace sustainability while leveraging cutting-edge technology. Stakeholders across the board have grown to be more mindful of mental health. And enthusiastic start-ups will quickly prove the faulty narrative of ‘globalization is dead’ wrong.

If you’re an entrepreneur at any stage of your business, these business trends for 2023 will undoubtedly arm you with the right ammunition to create informed, winning business strategies for the year. 

If you are looking to start-up, expand or buy a business in Canada, don’t hesitate to get in touch with our advisory team today.

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