EIU – Industry Outlook, 2024

The introduction to the EIU - Industry Outlook, 2024 highlights several key challenges, opportunities, and trends that will impact businesses in six sectors. The first challenge is the appreciable impact of climate change on countries and businesses. Sectors related to mitigation and adaptation will experience increased demand, but insurers and governments will struggle to assess the growing risks. The second challenge is the introduction of new regulations in the EU and US that will require companies to improve their environmental, social, and governance reporting. However, skepticism about these measures will increase in the US leading up to the presidential elections in November. The third challenge is corporate concerns over taxation as the OECD implements a global minimum tax rate and individual governments attempt to reduce budget deficits and national debt levels resulting from the Covid-19 pandemic. Geopolitical tensions between China, Russia, and Western allies, as well as higher risks in the Middle East, will complicate government and corporate responses to these challenges. Investment in supply chains, especially for technology and the energy transition, will be adjusted to minimize political risk. Lastly, the increased adoption of generative artificial intelligence (AI) will reshape companies and jobs. While it will disrupt sectors such as marketing, arts, business services, and education, most companies will find ways to use AI to increase productivity. Looking ahead to 2024, businesses will face a combination of ongoing challenges, including the pandemic, commodity prices, interest rates, and political disruption, along with the additional complexities of accelerated climate change and El Niño. The focus will shift towards reducing emissions, investing in renewables and electric vehicles, and developing products to minimize the effects of climate change.