Looking Back, Looking Ahead

Welcome to the final issue of The Supply Times for 2021. This week, we’ve got a slightly different format that both looks back on the most important stories of the year and also looks ahead to what 2022 has in store.

Looking Back

As we put 2021 in the rearview mirror, there are three main areas that stood out: A strong economy, a rising stock market, and the reality of surging inflation (and unfortunately, the variant virus). 

Of particular interest was how the labor market fared this year. We’re ending the year with a 4.2 percent unemployment rate and an economy that added an average of 550,000 jobs per month. On the flip side, we still have more job openings than unemployed workers, as resignations peaked in late Q3 when 3 percent of all workers walked away. Adding to the challenges is that about 3 million people still haven't returned to the labor force.

The Wall Street Journal put it succinctly that there were two major labor shocks this year—one for those who lost their jobs and the other for those who kept theirs. 

Employers still feel more empowered than they should, considering how the talent pool comprises employed and unemployed candidates. However, the employed feel they have more leverage as passive candidates since they have more financial security and can be more selective as they job hunt.

People Power

Over the year, we saw power shift to workers as companies scrambled to hire during the labor shortage. The pandemic shifted workers’ priorities as Covid fears, childcare needs, and extra unemployment benefits kept many home, and job openings soared as workers looked for better options.

Meanwhile, corporate behemoths like Target and Walmart engaged in a battle of benefits, hiking wages and dangling perks such as free college tuition.

With a record 11 million job openings on one side and a low 4.2% unemployment rate on the other, emboldened workers have negotiated an average of 4.8% higher wages this year.

Looking Forward

What will 2022 bring? In its brilliant end-of-year presentation, The Economist shared many of its predictions for the world ahead. Below, I’ve compiled some of its more intriguing predictions.

The Future of Work

Despite loosening quarantine restrictions, 2021 saw few offices returning to business as usual. Many employees found ways to continue working from home, and there’s consensus that the trend will continue—and grow—next year.There’s also a growing disparity between where white men prefer to work and their counterparts. Females and minorities are less interested in working from the office, where they may face unfairness or discrimination. As a result, there’s a danger that the hybrid workplace could be less fair than they were beforehand, because the white, childless men working on site could be more visible and thus more eligible for raises and promotions.

Economic Uncertainty

Supply chain crunches and increased energy prices are a natural consequence of the economy’s recovery from the pandemic. As a result, we’re also seeing absurd inflation numbers.

Economists believe this is temporary, but subsequent Covid outbreaks may put additional stress on the system because governments will not be able to stimulate the purchase of goods in the same manner they did in 2020.

The Economist points out that 2022 will be a pivotal year for the global economy: either we return to something that resembles normalcy, or we’ll be forced to make a painful economic adjustment with increased interest rates.

Crypto Grows Up

What we’re seeing with cryptocurrency smacks of past innovation: in the 90s, early internet enthusiasts put their full weight behind the product, claiming it would change the world. The difference between previous tech trends and crypto is that in this situation, regulators are already tightening the reins.

Next year, we’ll continue to see the development of three competing visions for how crypto will be utilized: big players like Apple and Facebook developing their own payment services; the DeFi crypto crowd who wants to decentralize everything with completely new technologies; and the central bankers who want to carve out their own currencies. The victor of this battle will ultimately depend on regulation.

The New Techlash

China’s brutal crackdown on tech giants has been an interesting experiment in forcing the industry’s way forward, but experts believe hampering innovation and entrepreneurship will ultimately result in it being left in the dust.

While the US government would love to regulate juggernauts like Facebook in a similar manner, it’s simply undemocratic. As such, look for a slower, more subtle form of regulation that likely won’t include any Teddy Roosevelt-style breakups.

Top 5 Things I read, watched, listened to, and thought about

• 2034: A Novel of the Next World War by Elliot Ackerman and Admiral James Stavridis – This was my fiction book of the year. In a timely book written by two former military officers, this book pits the US and China in a global conflict. With Russia, Iran, India, and others all playing a role, this book covers the spectrum of the key players as a Naval conflict unfolds that upends the world. Considering how the current geopolitical alliances are shaping up, this is as terrifying as it is an enjoyable read.    

• Four Thousand Weeks: Time Management for Mortals by Oliver Burkeman – A thought-provoking time with a contrarian twist on time management and productivity. Since our modern attempts to optimize our time leave us stressed and unhappy, the author proposes a path to fulfillment by embracing our limitations. With an average lifespan of 80 years translating to 4000 weeks, no need to obsess over life hacks and trying to do it all. The more productive and efficient you are, the more work you’ll get done. Think work emails—the more you send, the more you’ll receive. The main takeaway is that no one accomplishes everything they’d like to, so we should make peace with that.

• Think Again: The Power of Knowing What You Don’t Know by Adam Grant – I’m a firm believer in one’s ability to change their mind and to “think again.” Thus, the insightful book by Adam Grant made my list. Grant examines the science behind persuading others and explores the biases and assumptions that we bring to our decision-making. He also outlines how individuals and organizations can build a mindset for lifelong curiosity. Something fellow procurement/supply chain practitioners will appreciate is how the author describes three key things the best negotiators do to change people’s minds:After reading this book, when someone tells you they’re 100 percent certain of something…You’ll be certain they’re wrong. 

  • They find common ground with the other party.

  • They achieve more with fewer arguments.

  • Mediocre negotiators act like preachers and prosecutors; the best ones behave like scientists.

• TV wildcard: Succession – In terms of television, Succession gets a lot of mention, and rightfully so. I’d say it’s a tough call between that one and Billions for the best show of the year. Beyond their entertainment value, they offer a glimpse into the sometimes sordid and always insatiable nature of just never having enough for the creme da le creme. Logan or Axe, there’s no shortage of drama or dysfunction in what could also be dubbed as the lifestyles of the rich and famous. The one-upmanship, the comeuppance, and the extravagance of these larger-than-life characters is a sight to behold. 

• Crypto Culture: This year what's been on my mind aplenty is how crypto, specifically Bitcoin, became a lot more mainstream in 2021. According to Bloomberg, even the venture capitalist funds plunked down $30 billion into the crypto world. From Bitcoin's inception in 2008 to date, 114 million people globally hold this “digital gold.” The National Bureau of Economic Research reported this week that the top 10K Bitcoin accounts hold 5 million Bitcoins worth approximately $230 billion. In a similar vein, I'm also intrigued by how blockchain technologies will provide an opportunity to accelerate the decentralization of the likes of internet platforms, intellectual property, and even potentially creating and distributing money. At their core, these technologies are disseminating ownership among a group of users that can use computing power to 'mine' crypto or even record transactions for art, real estate, etc.  As we went from the 1990's Web 1.0 to the current big-tech controlled Web 2.0, watch out for a Web3 that promises a distributed and democratically ruled internet. Mind-blowing for those that get it and for those that don't.  

Wishing all our readers Happy Holidays, Christmas, and New Year.

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