5 must reads for your weekend

We keep our ear to the ground for the interesting stats, insights and discussion points you need to feel in the know.

1. Is this the demise of the office??

For billions of people worldwide, commuting to and working in an office has long been a staple part of working life. But that all changed in 2020 during the COVID-19 pandemic lockdowns. Today, hybrid work continues to be adopted as a flexible working model across industries - and the impact of decreased demand for office space, particularly among older properties, is producing a ripple effect in the US. Formerly bustling central business districts now look like ghost towns, with a lack of daily commuters to fill downtown office skyscrapers and frequent the restaurants and retail that were built to support them. Governments must subsequently now manage economic losses from a declining tax base - and a growing stock of obsolete, older office properties. So much so, that this has been coined one of the greatest challenges in the history of commercial real estate.?But it’s not all doom and gloom. According to the recent EY Future Workplace Index survey, 58% of organizations surveyed are investing in their existing real estate portfolios, even as “work” becomes less of a fixed place and more of a network of connected spaces for productivity. As corporate tenants continue to seek sustainability-minded Class A properties for in-person gatherings, building conversions offer an increasingly attractive solution, with benefits for all parties involved. Cities hold the future of their economic resiliency in their hands - and the time to act is now.?

The Office: Bellwether for distress or opportunity for revitalization??

2. Shrinkflation??

Have you been experiencing “shrinkflation” during your weekly shop? According to the latest EY Future Consumer Index, 74% of consumers globally are noticing?the phenomenon - where pack sizes shrink but prices don’t. Recent headlines are?doing little to help brands build consumer trust either - high profits reported by many consumer companies over the last year have given impetus to accusations of “greedflation” where companies exploit inflationary headwinds to overly increase prices. Take the?UK, for example, where competition watchdogs have launched an?investigation?to assess whether retailers have been overcharging customers for their food and fuel. Instances?like this pose significant challenges for consumer companies. “Many retailers have, in fact, pushed back on suppliers to keep prices stable or have introduced price freezes on certain essential items to support customers.” says Kristina Rogers, EY Global Consumer Leader. “Brands have sought to address price rises by reformulating products, consolidating portfolios and applying trade discounts. But consumers may not see much of this activity; instead, they see rising prices for what they buy and rising profits for many of the companies that sell to them.” But it’s not all bad news. Kristina tells us more?in her latest article. ?

Consumer trust is hard to win but easy to lose ?

3. Australia’s energy superpower?

Over the last 15 years, accelerating climate action has ‘bent the curve’ of global emissions. But limiting climate change to well below 2°C remains very challenging, particularly for materials- and energy-intensive sectors. Not only must these industries reduce fossil fuel use and non-combustion emissions, they must also replace chemical contributions - currently met by fossil fuels - and respond to growing demand for materials essential to the new energy transition. There's now an immense opportunity for any?businesses?that can solve these problems; and one country in particular has a distinct advantage. Australia has all the ingredients required to crack this conundrum; cost-competitive large-scale renewable energy, abundant minerals and natural resources, a highly skilled workforce, and deep access to capital. So what must Australia do today to become an energy superpower tomorrow? ?

The energy superpower opportunity: Can Australia seize the advantage in a net zero world??

4. Time is pressing on

“It feels wrong that the future of our planet gets such limited attention" says Jim Doucette, Global EY Parthenon Consumer and Retail leader. Despite our best intentions, efforts to halt or reverse climate change are not being backed up with the actions needed to achieve our goals – and this is evident in the consumer space. One challenge for consumer companies is that the scale of organizing and delivering the change needed is huge, and complicated. Take annual emissions, for example – they’ve continued to rise almost unabated since the industrial revolution, passing 37 billion tons in 2021. So, whilst many companies are making commitments towards reduction targets a Ceres report recently found that none of North America’s 50 largest food companies are aligning spending plans to their climate targets, and half are still unable to disclose their indirect emissions. It’s safe to say, addressing climate change demands systemic action and strong commitments from business leaders. However, prioritizing environmental concerns is challenging for businesses amidst competing priorities like inflation, politics, and disruption. Jim Docuette shares more in his latest article.??

The imperative to act on climate change is only getting hotter?

5. Addressing skills shortages ?

The shelf life of skills is changing quickly. Hyper disruption means the talent gaps we’re facing now are vastly different from anything the market’s faced since the first industrial revolution. Make no mistake, no industry is left behind either. Even though macroeconomic factors are beginning to lessen the immediate impact of a shrinking workforce, these shortages represent a generational shift that’s not disappearing any time soon.?So, what’s driving this change? In short, digitalization. The skills that once ensured a long-lasting career might now become obsolete in just 18 months as connected technology and artificial intelligence (AI) accelerate the pace of change.?By 2030,?85% of those who work will be doing jobs that don’t even exist yet?and?in-demand skillsets will likely be very hard to find which adds?pressure to organizations on how they consider how to reskill and upskill employees. This has resulted in many companies doubling down on learning investments to make progress on this front.?That said, throwing money at this problem isn’t a solution in and of itself. Organizations’ learning spend should be directly aligned to current and future business needs to make an impact...?

Deploy tech wisely to close critical skills gaps?

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