A year full of adaptation challenges

As 2024 unfolds, there’s a lot to reflect on business-wise. For those navigating this entrepreneurial world, it’s always a big help to get a sneak peek into the future. So if you’re looking for an article that sheds some light on what this new year is bringing us, keep on reading- this interview with Pedro Pereira, Managing Director and Partner at Boston Consulting Group.

How might technological advancements, such as AI, reshape companies in the coming year?

The Emergence of Generative AI in Business Transformation

The advent of Generative AI is creating a landmark shift in technological advancement, comparable to the “iPhone moment” in the realm of business. This transformative technology is redefining how companies will operate, with the potential to revolutionize their business models, significantly enhance operational efficiency and productivity, and substantially boost profitability and returns. As we move into the coming year, GenAI stands poised to be a game-changer in the business landscape.

GenAI’s influence is all-encompassing, profoundly reshaping every facet of a company’s operating model. Its capabilities extend from revolutionizing sales and distribution strategies, enabling smarter and more efficient ways to reach and engage customers, to transforming marketing and customer value management through unparalleled personalization and targeted campaigns. GenAI also redefines customer service, offering more responsive and intuitive support, while simultaneously enhancing operations with optimized efficiency.

In terms of technological delivery, it facilitates the seamless integration of cutting-edge solutions, ensuring businesses stay at the forefront of innovation. This end-to-end impact of GenAI positions companies to not only meet but exceed modern market demands, driving a significant competitive edge in an ever-evolving business landscape. Below are some of the use cases we see being tested and deployed across industries.

• Marketing & Personalization: GenAI can analyze vast amounts of data to understand customer preferences, enabling businesses to offer highly personalized products and services. This could range from tailored marketing campaigns to customized product recommendations, significantly enhancing customer engagement and satisfaction.
• Automation and Intelligent Decision Making: Beyond automating mundane tasks, GenAI can provide deep insights for strategic decision-making. For instance, it can predict market trends, optimize supply chains, and even assist in high-level decision-making by providing scenarios based on comprehensive data analysis.
• Innovation in Product Development: GenAI can accelerate the product development process, from initial design to testing. By analyzing market data and consumer trends, it can suggest innovative product features or improvements, shortening the time to market and increasing competitiveness.
• Enhanced Customer Service: AI-driven chatbots and virtual assistants can handle our support human operators in customer queries efficiently, providing quick and accurate responses. This not only improves customer satisfaction but also frees up human resources for more complex tasks.
• Software and Solution Development: In the realm of software development, GenAI can write code, debug, and even optimize algorithms, speeding up the development process and reducing the likelihood of human error.

The application of GenAI in these areas is transformative, leading to cost reductions, increased efficiency and productivity, and an empowered and more effective workforce.

Notwithstanding and despite widespread recognition of the transformative potential of Generative AI, there remains a noticeable gap in its adoption at scale among businesses. While most companies are cognizant of the benefits it offers, only a handful are truly delving into experimenting with it extensively. This hesitation or slow adoption can be attributed to several factors. Firstly, deploying GenAI at scale requires significant investment in technology and infrastructure, which can be a substantial financial commitment. Secondly, there is the challenge of developing or acquiring the necessary skill sets among the workforce to effectively leverage this technology. The proficiency needed to integrate and manage GenAI systems is not yet commonplace, and the training or hiring to fill this gap represents another layer of investment and organizational change. Lastly, and perhaps most critically, there’s a need for robust governance structures.

Implementing GenAI involves navigating complex issues of data security, privacy, ethical AI use, and regulatory compliance. Establishing these frameworks is vital but can be a daunting task for many organizations. Consequently, while awareness of GenAI’s potential is high, the journey towards its full-scale implementation is still in its infancy for most companies, marked by cautious exploration rather than bold, widespread adoption. Below are a few steps our companies can and should address to navigate and successfully start transforming there business and operating models:

• Identifying High-Value Areas: Businesses must pinpoint areas where GenAI can have the most significant impact. This involves assessing current operations to identify processes that can be optimized and rethink them E2E to fully exploit the potential of GenAI vs implementing it in isolated sub-processes, which might limit its full potential
• Investing in Technology and Infrastructure: Adequate investment in the right technology and infrastructure is crucial. This includes not only the AI technology itself but also the data infrastructure and computing resources needed to support it.
• Skill Development and Training: Equipping the workforce with the necessary skills to work alongside GenAI is vital. This means investing in training and development programs to upskill employees, ensuring they can leverage AI tools effectively.
• Implementing Strong Governance Frameworks: Addressing risks associated with GenAI, such as data security, privacy, and ethical considerations, requires robust governance frameworks. This involves developing policies and procedures to manage these risks and ensure responsible use of AI.
• Fostering a Culture of Innovation and Adaptability: Cultivating a company culture that embraces change and innovation is essential. Employees should be encouraged to experiment with AI solutions and think creatively about how to apply them to their work.

In conclusion, the integration of GenAI presents a transformative opportunity for businesses, offering a plethora of applications across personalization, automation, customer service, and more. However, capitalizing on this potential requires a strategic approach involving identifying key areas for AI application, investing in necessary technology and skills, and implementing robust governance frameworks. Businesses that successfully navigate these steps will be well-positioned to harness the power of GenAI, leading to enhanced efficiency, innovation, and competitiveness in the marketplace. Ignoring this evolution, on the other hand, may lead to obsolescence in an increasingly AI-driven world.

How might geopolitical shifts impact international business and markets in Portugal?

Navigating Geopolitical Shifts: Risks and Opportunities for Portugal’s International Business and Markets

In the dynamic world of international trade and economics, geopolitical shifts play a pivotal role in shaping the fortunes of nations. Over the past five years, the global geopolitical landscape has been marked by several significant events that have reshaped international relations and economic dynamics. Key among these have been the escalating tensions and conflict between Ukraine and Russia, and the ongoing confrontations between Israel and Hamas.

These events, alongside other global shifts such as the rise of populism and trade protectionism, the impact of Brexit on EU-UK relations, and the technological cold war between major powers, have collectively influenced global trade, political alliances, and economic strategies, presenting both challenges and opportunities for nations worldwide. For a small yet potentially agile economy like Portugal, these shifts present a complex tapestry of risks and opportunities.

The geopolitical shifts and economic volatility of recent years have introduced significant risks to the Portuguese economy, particularly in the realms of trade, economic dependency, and technological disruption. Fluctuating trade policies and a global trend towards protectionism have created a climate of uncertainty, potentially destabilizing export markets that are vital for key sectors in Portugal.

This is exacerbated by Portugal’s economic dependency on certain industries like tourism, which makes it particularly vulnerable to global shocks and shifts in international travel and trade patterns. Furthermore, the rapid pace of technological change and the disruptions it brings pose a unique challenge. As a smaller economy, Portugal must navigate and adapt to these technological advancements to stay competitive, a task that requires significant investment and agile response to the evolving global tech landscape. These factors collectively underscore the need for Portugal to diversify its economy and enhance its technological resilience to mitigate the impacts of these geopolitical changes.

On the flip side of the coin, some of these events have opened a window of opportunity for Portugal, that probably for the second time in its history is potentially positioned in a favorable geopolitical position. Thus, in the evolving global landscape presents a spectrum of opportunities for an adaptable economy like Portugal’s. The shifting dynamics in international trade create an opening for Portugal to diversify its trade partners and enter in disrupted value chains, exploring and establishing new markets that can enhance economic resilience. This period also underscores the importance of investing in emerging sectors. Portugal, with its potential in healthcare, digital infrastructure, and technology, is well-positioned to advance in these areas.

A significant opportunity lies in the realm of renewable energy. With the global emphasis on sustainability, Portugal can leverage its natural resources to become a leader in renewable energy, aligning with environmental goals while fostering economic growth. The current technological cold war also offers Portugal the chance to emerge as a neutral and innovative digital hub within Europe, capitalizing on its strategic position and technological capabilities.

Additionally, the changing global circumstances provide a chance to reimagine its tourism sector, focusing on sustainability and diversity to make it more resilient to international fluctuations. Importantly, these developments, coupled with Portugal’s vibrant culture and high quality of life, make it an appealing destination for skilled professionals worldwide, enriching its labor market and fostering a diverse, innovative workforce. Collectively, these opportunities can help Portugal not only navigate but thrive in the face of global changes, transforming challenges into catalysts for growth and innovation.

What changes in workforce dynamics or talent acquisition strategies do you expect in the upcoming year, particularly in light of remote work trends?

In the upcoming year, we can anticipate significant changes in workforce dynamics and talent acquisition strategies, particularly influenced by the ongoing trends in remote work. These changes are likely to reshape the landscape of employment and human resource management in several key ways:

• Widening Talent Pools: The continuing trend of remote work allows companies to tap into a broader talent pool, not limited by geographical boundaries. This global reach enables businesses to access diverse skill sets and perspectives, which can be especially beneficial for roles where local talent is scarce or in high demand.
• Flexibility as a Key Offering: Flexibility will become an even more critical factor in attracting and retaining talent. Candidates are increasingly seeking work-life balance, and the ability to offer flexible working hours and locations will be a competitive advantage in attracting top talent.
• Emphasis on Digital Collaboration Skills: With remote work becoming more prevalent, proficiency in digital communication and collaboration tools will be essential. Talent acquisition strategies will likely place a greater emphasis on these skills during the hiring process.
• Changes in Employee Onboarding and Training: Virtual onboarding and training programs will become more sophisticated as remote work persists. Companies will invest in developing comprehensive online onboarding experiences to integrate new employees effectively into the company culture and work processes.
• Shift in Employee Engagement Strategies: Remote work poses challenges in maintaining employee engagement and company culture. We can expect innovative approaches to virtual team-building activities, online engagement initiatives, and continuous feedback mechanisms to keep remote employees connected and engaged.
• Increased Focus on Mental Health and Wellbeing: The mental health impacts of remote work, such as isolation and burnout, will drive companies to enhance their support for employee wellbeing. This may include access to mental health resources, wellness programs, and initiatives to promote a healthy work-life balance.
• Redefining Performance Metrics: Traditional performance metrics might not be as effective for remote workers. Companies may shift towards more results-oriented performance evaluations, focusing on output and quality of work rather than hours spent on tasks.
• Enhanced Use of AI in Recruitment: The use of AI in screening candidates, analyzing job applications, and conducting initial interviews is expected to increase. This technology can help streamline the recruitment process, making it more efficient and less biased.
• Reskilling and Upskilling Initiatives: As the nature of work evolves, there will be a growing need for reskilling and upskilling employees. Companies will likely invest more in training programs to ensure their workforce is adept at new technologies and can adapt to changing job requirements.
• Long-Term Remote Work Policies: Finally, companies will formalize their remote work policies, moving from temporary pandemic responses to established long-term strategies. This includes setting clear guidelines on remote work practices, communication, and expectations.

In conclusion, the upcoming year is expected to bring continued evolution in workforce dynamics and talent acquisition strategies, heavily influenced by remote work trends. Flexibility, digital collaboration skills, employee wellbeing, and effective use of technology will be key themes in navigating these changes.