Remember when the pinnacle of evolution was playing the snake game on a Nokia phone 20 years ago? Calm down, I’ll explain to you what this has to do with the New Economy.
Today, we can laugh with a dose of nostalgia for technological changes. But another curious point is to realize that Nokia, the leading cellphone brand at that time, lost a huge market share to Apple, Samsung, and Huawei.
What has changed? The increase in connectivity, technological transformation, and the behavioral revolution we are experiencing has led to new ways of conducting business and enabled the birth of what is called the New Economy.
One of the most striking features of the New Economy is to consider, in the first place, the customer’s needs, which has been bringing growth opportunities for companies willing to innovate and adapt quickly.
The strength of the New Economy
When we talk about these transformations, we are talking about massive impacts. Here are some examples related to the New Economy to illustrate:
- A quarter of US malls are expected to close in the next five years – a trend that took hold even before Covid-19. On the other hand, e-commerce there grew 44% in 2020 alone and already represents 21% of total retail sales.
- Even feeling the effects of the pandemic on tourism, Airbnb is worth more than the three largest hotel chains combined.
- Only seven years in Brazil, Uber already has 1 million drivers in the country. This is equivalent to the entire population of Maceió (AL). In other words (or numbers!), 1% of the economically active population of our country.
Did you realize that all these changes are relatively recent? This means that in the New Economy, the only certainty you have is change.
Okay, but what is the New Economy, and what makes it different from the previous model? How can you become a professional prepared to work in companies that are constantly changing? And what is the future of the New Economy?
Starting from the beginning: what is the New Economy?
First of all, I have news for you: the expression “New Economy” is not that new. The term was created in the 1980s to describe fast-growing companies that are at the forefront of technology and lead the country to economic advancement.
The definition also marks a movement from the sale of products to a greater focus on the sale of services. Of course, we still buy and sell products, but the sale of services, made possible by technology, has gained more prominence.
And, about the sale of services, we can mention other movements brought by the New Economy, such as the Shared Economy (transactions between users mediated by a platform, such as Uber, Airbnb, iFood) and Gig Economy (linked to freelance work).
Time passed and, from the ’80s until now, the New Economy encompassed other attributes. Many of them, influenced by the increase in competition between companies and a new consumer profile – more active about what they want, looking for experiences, personalization, and an intimate relationship with brands.
In the preface of the book “New Economy: Understand why the entrepreneurial profile is swallowing the traditional Brazilian entrepreneur”, Fábio Bloisi, CEO of iFood, mentions as characteristics of New Economy companies :
- They put innovation, technology, data, and digital channels at the heart of the business.
- They listen to the customer and are willing to adjust plans.
- They are open to new management models.
- They have a sense of purpose and protagonism in social changes such as reducing inequality and increasing diversity.
Furthermore, these companies tend to have less hierarchy in their internal structure, which decentralizes decisions and streamlines processes.
Old Economy x New Economy
Want to better understand the differences between the Old and New Economy? Take a look at this summary below:
The Netflix example
There is an emblematic case that explains the difference between Old Economy and New Economy. If you haven’t heard, it’s worth knowing. After all, this story became a classic to explain the importance of anticipating and understanding the potential of innovations.
The year was 1999. Netflix co-founder Marc Randolph and his partners knocked on the door of John Antioco, CEO of Blockbuster, with an innovative proposal for the time: a video rental service via mail. Netflix partners wanted $50 million for the company (to give you an idea, it’s worth $158 billion today).
Needless to say, the deal was not closed, right? In the book “ That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea ”, Randolph says that the Blockbuster executive was trying to hold back his laughter during the meeting.
And the story doesn’t end there. In 2004, Blockbuster tried to make a service identical to Netflix, sending DVDs by mail. But Netflix had already dominated the market and more: it was looking to the future, a world without tapes or DVDs.
In summary, adapting to the changes that the market demands are essential. And n will just innovate, you need to make this quick.
How to stand out in the New Economy
Some skills are essential in the New Economy scenario and are already a priority for companies from the moment of recruitment to the day today.
Likewise, organizations need to constantly analyze themselves and see how they can seize the opportunities of the New Economy.
Skills that professionals must develop
“The 21st century illiterate are not those who cannot read and write, but are those who cannot learn, unlearn and relearn.” This sentence sums up well what the mindset of professionals in the New Economy needs to be.
It was said by researcher, writer, and futurist Alvin Toffler, referring to lifelong learning, or continuous learning. In fact, this is one of the most relevant skills until 2025, according to the World Economic Forum.
Now, check out other essential skills to stand out in the New Economy job market:
You can only control what you know, right? Having Emotional Intelligence is, therefore, using self-knowledge to make more conscious choices and build healthier relationships in all areas of life.
Get to know the 5 pillars of Emotional Intelligence:
- recognition of emotions
- control of emotions
- interpersonal skills
It is worth delving into this topic. Therefore, we produced a complete article on Emotional Intelligence.
Leadership and self-management
More horizontal organizations have transformed the concept of a leader. The figure of the hero leader (controller and centralizer) begins to be understood as harmful to the company, giving space for employees to take the lead and know-how to self-manage.
In a world with unexpected events and therefore full of challenges, cooperating to achieve better results is essential. For this, it is necessary to establish constructive dialogues, with empathetic listening and sharing of responsibilities.
Critical thinking and complex problem-solving skills are already mandatory skills. But it is necessary to go further to stand out: be able to make decisions with assertiveness, agility, and critical thinking.
Decision-making is increasingly decentralized and routines are accompanied by an increasing amount of data and information to be analyzed. Therefore, professionals who know how to do this type of analysis come out ahead in the job market.
Automation is a reality for many types of jobs. A robot can simplify activities, leaving the human side of the job to us humans! Therefore, our potential to think about innovative solutions is an asset for companies.
And, rest assured, it’s not a question of being born creative or not. In other words, creativity is trainable and can (why not say, must) be developed. By the way, we did an article on creativity that gives some tips on how to do this.
Adaptation and flexibility
With the world in motion, it is recommended that professionals can see unexpected events as opportunities and not obstacles – a skill that traditional education does not teach. This ability makes the work routine more fluid and efficient.
Best Practices for Businesses
In the VUCA world (ie Volatile, Uncertain, Complex, and Ambiguous), companies need to reinvent themselves in several ways. See some examples:
The concept means thinking about the current moment, but also about the future of the organization. And have teams working on these plans. In this sense, you can propose a total transformation of the business or an innovation linked to expansion, in other words, bringing in more customers.
Remember the Netflix example? Here it fits well. Of course, the future is not predictable, but being aware of trends and innovating from this analysis is a good way to stay ahead of your competitor.
Changes will be more and more frequent and, therefore, it is necessary to be agile. This doesn’t mean rushing through everything without considering variables. Therefore, change management is a methodology that aims to support and prepare employees in new processes or structures to obtain the best results.
Tools for building the future
Welcome to the future of the New Economy. Or would it be to the present? The tools we list below will be used most often in companies, but they are all present in organizations with an innovative DNA.
Data Science or Data Science
The future is data-driven, that is, data-driven. By the way, have you ever heard that data is the new oil?
First of all, to fully understand this statement, it is worth reading this sentence by Clive Humby, a mathematician who studies the phenomenon: “data is the new oil. It’s valuable, but if unrefined, it can’t really be used. ”
With hyperconnectivity, companies and customers produce a huge amount of data. But it needs our human side to analyze and thus generate insights, ideas, improvements, or new products and services.
A super-competitive market requires innovations and quick decision-making. Often, it is this timing that will differentiate a company from its competitor.
Therefore, companies tend to increasingly adopt agile methodologies. They are more efficient management models that carry out the company’s purpose. The objective is both to make processes more agile, as well as to generate value.
See four values of the Agile Manifesto :
- Individuals and interactions over processes and tools.
- Working software above comprehensive documentation.
- Collaboration with the client above contract negotiation.
- Respond to changes above faithfully following a plan.
We are in an era where consumers exchange information with other customers, quickly search for prices, and are surrounded by ads that want their click.
In other words, the customer is disputed and the companies that want to win him over need to know him in depth. For this, organizations can rely on Design Thinking, a user-centered approach that uses design principles to create or improve products and services.
To generate insights and ideas, Design Thinking consists of three phases: immersion, ideation, and implementation. In the end, data are collected to make route adjustments.
Lean Methodology or Lean Management
Also associated with the Agile Manifesto, the Lean Methodology is a management philosophy inspired by Toyota System practices and results, which aims to avoid wasting time, money, labor, etc.
Thus, it is necessary to be aware of problems that may be hindering processes; offer support to the team to ensure the quality and speed of deliveries; and establish clear workflows, prioritizing demands.
professions of the future
Considering the digital transformation and, with it, the emergence of new functions, some professions are on the rise in the labor market or should emerge in the coming years. See what they are:
The future of the New Economy
It’s contradictory to point in a direction for the New Economy if everything we’ve read so far has been about the high degree of volatility and uncertainty we’re experiencing, isn’t it?
At the same time, these revolutions in a short period of time give us a clue that the speed of transformations will be even faster: with more technology, more automation, and possibly more decentralization.
Therefore, instead of just responding to changes, professionals and companies should proactively position themselves in the face of transformations, continuously learning. That way, we will all be better prepared for the next news.