AI and the Economy: A Guide for Business Owners and Employees for the Next Decade
An unmistakable shift is happening, driven by a confluence of powerful forces: a global economy still finding its footing after the pandemic, persistent higher inflation, escalating geopolitical tensions, and the unpredictable nature of internal political stability. Layered on top of all this is the accelerating pace of artificial intelligence, whose breakthroughs and unforeseeable improvements are set to fundamentally transform how value is created and how businesses compete. Based on these observations, I’ve come to a perhaps uncomfortable conclusion: the next 6 to 8 years will be a much tougher environment for everyone. For employees, finding a secure job will demand a new kind of preparation, and for business owners, surviving and thriving will require a level of agility never seen before.
A World Finding its Footing After COVID
The global economy is currently in a state of tentative recovery, a complex and at times contradictory period following the seismic shock of the COVID-19 pandemic. While many countries are finding their footing, the business situation remains a high-stakes balancing act.
In the initial stages of recovery, we saw a massive bounce-back in consumer demand (think revenge travelling), fueled by pent-up savings and government stimulus. This surge was a welcome sign of life, but it collided head-on with a brittle and disrupted global supply chain. Manufacturing, still recovering from pandemic-era shutdowns and labor shortages (previously went back to home country and not back anymore), simply couldn't keep pace. This perfect storm of limited supply and overwhelming demand ignited a level of inflation not seen in decades. Businesses were forced to contend with soaring costs for raw materials, shipping, and energy, squeezing profit margins and leaving them with a difficult choice: absorb the costs or pass them on to consumers.
In response, central banks around the world began aggressively raising interest rates to combat inflation. While this action has started to show some effect in cooling down overheated economies and bringing price increases under control, its impact is far from uniform. The higher borrowing costs have made it more expensive for businesses to invest and expand, and for consumers to take out loans. This has created a tightrope walk for policymakers, trying to rein in inflation without tipping the global economy into a recession. The business environment is thus characterized by this ongoing tension—managing persistent inflationary pressures while navigating the headwinds of higher interest rates and a still-fragile supply chain.
Geopolitics Tension & Internal Politics
The business world today is being reshaped by a level of geopolitical tension not seen in a generation, and the impact is far more profound given the preceding golden era of globalization. For decades, businesses operated on the assumption of open borders and frictionless trade, weaving intricate, interconnected supply chains that spanned the globe. That era is now over. In its place, we are seeing the frequent use of tariffs, particularly from large economies like the United States, as well as increasingly common export controls on critical technologies. These moves are not just about economics; they are strategic national policies that create a ripple effect, forcing businesses to absorb rising costs and seek out entirely new suppliers and markets.
This friction is compounded by major ongoing wars that disrupt key trade routes, drive up energy prices, and inject a dangerous level of uncertainty into an already volatile environment. The impact of each of these events is far-reaching because our deeply integrated global economy, built for collaboration and efficiency, is now being forced to adapt to a new reality of fragmentation and rivalry. Adding to this instability, many countries are also dealing with internal strife—fueled by factors like the rising cost of living—which can lead to sudden policy shifts and political volatility. This perfect storm of external and internal tensions makes long-term planning an immense challenge for any business.
Rise in AI - Unforeseeable Breakthrough
The pace of AI's advancement feels relentless, and the implications for the workforce are becoming starkly visible. It’s like a real-life game of Pac-Man: while AI rapidly "chews up" an ever-increasing number of tasks, humans are left scrambling to find and occupy higher-value, more strategic roles. The "ghosts" are the unforeseen disruptions and skill gaps, and with just one touch, the game ends—job loss. We're already seeing this play out in real time, with many professionals in their 30s and beyond struggling to re-enter the workforce after retrenchment, often finding their once-valuable skills now obsolete in an AI-augmented job market.
This complex and fast-moving technological landscape is colliding with the daily pressures faced by business owners, who are already grappling with rising operational costs and mounting geopolitical tensions. For many, tackling these immediate, tangible threats feels far more urgent than figuring out a new technology. They see AI as an abstract problem to solve another day, rather than an essential tool for survival.
This a critical disconnect. Business leaders are struggling to understand not just what AI is, but also the true value it can bring and the significant risks involved in its deployment. The prevailing narrative in the media and from tech companies often presents a one-sided, overwhelmingly positive view of AI's capabilities. Information on the inherent risks—such as data bias, security vulnerabilities, or ethical minefields—is much harder to find and requires a deeper level of engagement. Moreover, there's a serious lack of practical, accessible information on the resources truly needed to adopt AI effectively, including the required skills, infrastructure, and strategic planning. This information gap leaves business owners feeling overwhelmed, uncertain, and ultimately, hesitant to act. This hesitancy to act can be fatal for the economy, and employees. Why? If business do not start hiring for the next growth phase, the resource pool in a country maybe off track and may not be able to tap onto the next business cycle.
Solutions?
Government: From Firefighting to Future-Proofing
Governments must move beyond simply reacting to technological shifts and take a proactive role in fostering AI adoption. Instead of focusing on crisis management or "firefighting" the immediate fallout of AI displacement, their schemes should be designed to propel businesses up the learning curve as fast as possible. This means creating programs that not only subsidize the cost of AI tools but also provide targeted education and mentorship. The goal is to help businesses transition from a mindset of survival to one of strategic growth, empowering them to hire for their next growth phase rather than merely trying to protect their current operations.
Business: The Strategic Value of a Fractional AI Leader
To navigate this rapid change, business owners need to secure the right expertise without the prohibitive cost or long-term commitment of a full-time hire. This is where the concept of fractional leadership becomes a powerful asset. By engaging a fractional AI practitioner, a company can supplement its existing C-suite with a seasoned expert who can quickly and efficiently get them up the data and AI curve. An AI practitioner provides the strategic guidance to identify high-impact opportunities, demystify the technology, and build a scalable roadmap. This allows a business to accelerate its growth and capitalize on new market opportunities without the risk of a misstep. (Recommended Podcast 1 & 2)
Individuals: Your Personal Learning Advantage
In this dynamic environment, an individual's career resilience depends on their personal learning velocity. The key is to find a good mentor, someone who has navigated similar terrain and can provide invaluable guidance and insights. More importantly, you must be agile in your learning approach. This means abandoning rigid, long-term plans for a more flexible, adaptive strategy that prioritizes what's most relevant today. Continually working to maintain your learning momentum is crucial. Think of it as a constant, low-level hum of curiosity and skill acquisition that keeps you ready for whatever comes next. This proactive stance is the most effective way to stay ahead of the curve.
Conclusion
The challenges ahead are real and multi-faceted, stemming from a perfect storm of economic, geopolitical, and technological forces. The next several years will demand a level of agility and foresight from every one of us. For governments, the task is to move from reactive "firefighting" to proactive, strategic support, empowering businesses to adopt and integrate AI for long-term growth. For businesses, the time for hesitation is over; leveraging external expertise, such as a fractional AI leader, is a critical step to accelerate up the learning curve and secure a competitive edge. And for us as individuals, the responsibility lies in taking ownership of our own career resilience. By cultivating an agile mindset and relentlessly building our learning momentum, we can ensure we are not just surviving, but thriving in this new reality. The future isn't happening to us; it’s a future we have to actively build.
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