Whether it has been defined by unbridled optimism or hushed pessimism, Davos is always about addressing the big picture. At this year’s World Economic Forum, ‘polycrisis’ appears to be the buzzword to watch, signalling the cumulative effect of a challenging year.
With so many overlapping global issues under discussion, it can be difficult for tech companies to digest and translate it into sound public relations strategy. While there are many subjects to focus on, we’re going to focus on one of the biggest takeaways for tech companies: the end of the era of low interest rates.
The end of free money
Klaus Schwab, founder and executive chair of the WEF observed that “economic, environmental, social and geopolitical crises are converging and conflating”. He optimistically added that the aim of this year’s Davos was to get rid of the “crisis mindset.” But it is inescapable that economic uncertainty is in the air. Two-thirds of private and public sector chief economists surveyed by the World Economic Forum expect a global recession in 2023. Notably, 18% considered a world recession “extremely likely” – more than twice as many as in the previous survey conducted in September 2022. Only one-third of respondents to the survey viewed it as unlikely this year. Meanwhile, almost two in five CEOs reported that they ‘fear their global firms will be unviable within 10 years.’
Driving this gloomier view – the era of cheap money that has funded tech companies’ share prices, acquisitions and increases in market share appears to be at an end. Tech companies have already been feeling these effects and reacting with large rounds of layoffs for staff. Google, Meta, Microsoft, Amazon and Salesforce are just some of the most high-profile names to shed workers in the last couple of months, aiming to counterbalance rising interest rates, and correct for over-hiring during the Covid-19 pandemic.
Technology Communications goals for 2023
So as we look to the rest of the year, what goals should tech companies aspire to communicate? While the sense of crisis may be slow to shift, attention will return to more fundamental business measures: sales, stable growth, management and innovation. Tech companies, therefore, need to be transparent about their challenges and ambitions.
Naturally, tech companies will want to continue to set an exciting and optimistic tone – inspiring employees and investors is what has helped to build the legend of tech giants such as Amazon, Tesla or Google. PwC chairman Bob Moritz was one leader at Davos to highlight that skilled employees will have increased power, “so organizations have to then respond. You’re gonna have to maintain wages at a higher level. You’re gonna have to provide the benefits. You’re gonna have to provide optionality and flexibility in terms of how you work.” With many skilled workers and developers being let go, there could be a real chance for other industries to bolster their in-house teams and drive new innovation within their sectors. Tech’s loss could well be other businesses’ gain.
However, as economic reality also bites, it will be essential to set a consistent tone between communicating those challenges and ambitions. Davos juxtaposed the tech industry’s potential and peril. For every lofty ambition stated publicly, tech companies have risked undermining themselves by having to prioritise the business fundamentals. For example, just as Microsoft touted the impressive potential of AI projects such as ChatGPT to transform business, they announced mass layoffs for tens of thousands of employees globally. Criticism was greatly exacerbated when it was reported the company hosted a private Sting concert for its execs in Davos the night before announcing the layoffs. Other large tech companies such as Twilio have faced criticism for similarly poorly-timed events.
So as tech companies deal with a shift in their financial operations and face more scrutiny on profit and growth, they’ll need to ensure that their strategy is joined up from start to finish, thinking holistically about when and how important updates are communicated, while also inspiring people with ambitious goals such as important commitments to sustainability or employee health. It’s a dynamic new era for tech, where experienced, consistent, global intelligence is the best chance for success.