Seven challenges facing Irish business leaders in 2024

CEOs all over the world today must keep abreast of rapid changes in technology, plan prudently bearing in mind economic forecasts, stay on top of cultural and societal changes, and often navigate divisive issues.

Every year CEOs and business leaders in Ireland face challenges and seek opportunity. 2024 will be no different.

The big macro changes around the globe and geopolitical issues directly impact small and open economies like ours, and while every year seems to bring fresh considerations (was anything more complex than planning for 2021 during a pandemic), this coming year does seem to bring unpredictability and potentially rapid change.

I normally write this piece earlier in January, but such is the pace of work we are already seeing, it’s coming a couple of weeks later than anticipated. A good sign. So I am told.

Whether you are a country manager of a multinational, a founder, a family business owner, working in a PLC or a state agency, the following applies.

Please see seven major considerations for Irish business leaders in 2024 …

1.?????? Elections all over the world

There will be no fewer than 70 significant political elections in 2024. The results of these elections all over the world will impact over 4 billion humans, or over half the world’s population, including several major economic superpowers.

The Big Kahuna of them all will be the US elections in November, where we’re likely to see Trump v Biden in a bitter standoff while the rest of the world looks on in fascination and incredulously as to how the greatest country on earth goes about it.

There will be angry huff, and there will be acrimonious puff, but ultimately this may all come down to a small number of votes in critical swing states.

This election may be “local” to the US, but its ramifications are truly global.

good consultancies, ours included, have their own polling and modelling. Many are scenario planning a second Trump presidency and what this might mean for the economy.

The rise and rise of populist politicians (or extreme nationalists and far right politicians, depending on your interpretation) throughout Europe is to be closely watched along with how this manifests itself in the polls and in economic policy.

2.?????? A Sinn Fein led Government - It’s Housing Stupid ?

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As 2024 begins, Irish politics is also gearing up for a series of crucial elections.

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March is marked by two referendums, followed by the local and European elections in early June. All the while, the looming possibility of a late autumn / winter General Election creates an air of anticipation. Constitutionally, an election must be held by March 2025. However, it is looking more and more likely that we will see one in October or early November.

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All the talk in business circles is the “what happens when” Sinn Féin get in … and right now that looks a strong likelihood.

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Sinn Féin however, although still the most popular party, has experienced a softening in support with its polling average slipping from 33% in October to 30% in January. Another opinion poll in late January conducted by the Business Post and Red C show SF slip as far as 25%. The Government parties will take some heart and there is a race to run.

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Despite this, SF maintains a significant lead over Fine Gael and Fianna Fáil. The party's unwavering focus on housing remains central to its political narrative, as it vehemently criticises the Government for its perceived failure to address the housing crisis. This has been reinforced by early exchanges in the Dáil criticising “block buying” by investors.

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The June elections serve as a barometer for the subsequent General Election. Sinn Féin, having had a disappointing 2019 in local and European elections, is expected to gain significantly, positioning Mary-Lou McDonald as a formidable "Taoiseach-in-waiting”.

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Sinn Fein has spent much of the last three years softening its extreme edges and outlining business-friendly policies that would have been anathema to previous generations of party activists. Look out for changes to income tax, and more spend on public services such as healthcare and social welfare payments. But housing will still be the focus.

The bulk-buying of homes by commercial entities is very unpopular amongst the Irish public. Sinn Fein has led on calls to both ban this practice by hiking stamp duty for any entity buying multiple homes at the same time, as well as building 100,000 new social and affordable homes.

The wheels will keep turning if they do reach power. Michelle O’Neill’s strong performance in Stormont will also be noted.

One last point on politics at home is the rise of the far right and whether this will have any impact at local level elections and indeed the policies set out by parties, including SF. The nastiness and vitriol from the more extreme elements of this movement is not something we Irish are used to. But we may have to get more familiar with it. And mainstream parties often drift to where the local anger is.

3.?????? Wars, bloodshed and geopolitical uncertainty

For Irish business leaders, having two bloody wars on the egdes of Europe is a distraction at the very least, but potentially much more.

As Russia and Ukraine slog it out in the mud with no solution in sight, the world stares with disbelief and sadness at the horrific events and ongoing onslaught in Gaza.

The real fear is that the conflict in Palestine will continue to spread, bringing other regional superpowers into the mix. Tensions and violence in the Red Sea and Iran’s precarious state and role will be monitored closely.

The tone of Zelensky and his advisors in Davos changed, hinting at a willingness to do a deal as the region grows weary of war and destruction and moves to solution mode.

And then there is China, Taiwan and much more.

Amid persistent friction around geopolitics, supply chains and trade barriers, the strategic importance of China has increased in the minds of both CEOs and investors over the past year.

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4.?????? Economy wobbling

After years of sustained growth both domestically and beyond, the OECD stated that the economy here measured by gross domestic product (GDP) shrank by 0.6% in 2023. These stats are backed by the CSO, which said our economy contracted by 0.7% in the last three months of the year.

Looking ahead to 2024, 53% of CEOs around the world expect worsening economic conditions in the first half of 2024, according to the excellent and in-depth Teneo CEO and Investor Outlook Survey. In Ireland, the outlook and sentiment is mixed.

The OECD said that "heightened global uncertainties", Ireland’s trading partners’ weakening markets, and the effects of higher interest rates will all contribute to a falloff in growth.

We have seen cost of living issues, multinational wobbles and then bounce backs in the last 12 months. However, the OECD also predicts that inflation will continue to ease and that growth by GDP will pick up again in 2024 by 2.4% and 2.9% in 2025.

The IMF predicted the Irish economy will have a “soft landing” in 2024, as growth slows and falls to modest levels. In its latest outlook on our economy, the IMF pointed to “remarkable resilience” in the face of consecutive shocks, including the Covid-19 pandemic, and the energy crisis triggered by the war in Ukraine.

However, it is impossible to escape the underlying vulnerabilities we face, including inflation and indeed commercial property market issues. The IMF and others predict overall economic growth of around 2%. In the real world, money is readily available for investment, we are seeing an uptick in M&A activity and people are spending. A soft landing perhaps, but I’ve heard that one before…

5.?????? AI understanding

Regulators are catching up.

Businesses are adapting.

The speed of growth and the impact of Artificial Intelligence will be huge. AI is dominating media analysis, the argument about its use and misuse garners millions of column inches weekly and occupies the mindsets of investors and business leaders. But is AI an existential risk?

AI is very much of the now. Two years ago in Davos, you could not move left or right for Cyrpto. Whereas this year AI dominated Davos and the commentary around it.

CEOs need to first understand…then figure out the positive benefits..

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6.?????? Mega year of sport

There is nothing like sport to unite the world. And now more than ever in a divided world, we need it.

2024 is a year of mega sport. The Paris Olympics and Paralympics take centre stage but we also have a Euro 2024 tournament to look forward to, the Cricket and much more.?

Can sport spark much needed inspiration and act as a catalyst for change? Or, potentially, will we see boycotts, the threat of violence and political statements peppered throughout.

Billions will be spent on commercial deals and in Paris, over 40,000 athletes in 41 venues will be watched by hundreds of millions in every corner of the world. New heroes will emerge. Countries and leaders will use sporting success to help morale and prop up governments.

I expect to see amazing sporting performances, new heroes and new villains. But be braced for politics and sports to be mixed into an unhealthy cocktail. ?

7.?????? World of Work

The world of work was turned upside down by Covid-19. Workplaces in Dublin and their policies vary, with employees coming into the office for two to five days a week depending on the sector and business.

However, a very recent case close to home has potentially set a precedent in the remote working versus office-based work debate. A judge in the UK ruled against a senior manager at the UK Financial Conduct Authority who wanted to work from home full-time, finding that the office was a better environment for “rapid discussion” and “non-verbal communication”. Most CEOs would probably agree.

The debate rages on for now but this is something Irish business leaders will need to resolve. Balancing productivity and the desire for face-to-face engagement with practical realities.

The city centre coffee shops that service the commuter and office-based employee are a good barometer. Most are now seeing Dublin back to between 60-70% capacity of what it was in 2019. Commuters are back. Buses are full. Traffic is awful.

But, what is the right balance? And what other considerations should we be considering as leaders.

For instance, should there be different rules of engagement for those who are office-based and living in cities versus those who have moved away and work mostly remotely?

I predict the current three-day office/two-day home hybrid norm will slowly morph into four days over the next 12-18 months. Employees can expect more commuting, more in person meetings, more travel and an expectation to be present.

As the world returns to normal, you can also expect an exodus of mid to junior level staff to Australia and other popular destinations. And a return of those who have been away for some time.?

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Only one thing is certain, and that’s uncertainty.