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Navigating Volatility: Macro Outlook for 2024

May 3, 2024 122 0 Industry Trends Current Issues

Navigating Volatility: Macro Outlook for 2024

The global economic landscape is turbulent, marked by high inflation, geopolitical tensions, and supply chain disruptions. Central banks are combating inflation through interest rate hikes, but progress has been slow. The Federal Reserve expects rates to remain high as it seeks to control persistent inflation. This uncertain terrain poses unique challenges for businesses across sectors. Service Providers (SPs) are well-positioned to guide enterprises through these choppy waters with their diverse expertise and innovative solutions. The study dives deep into industry-specific hurdles and opportunities across multiple sectors, highlighting how SPs can empower businesses to overcome obstacles and capitalize on growth prospects. Zinnov’s latest report provides an in-depth analysis of how SPs can help enterprises navigate economic turbulence.

The global economic landscape is a turbulent sea, with waves of high inflation, geopolitical tensions, and supply chain disruptions threatening to capsize many businesses. However, amidst these choppy waters, there are signs of resilience and progress that serve as beacons of hope. Central banks worldwide have been diligently adjusting their monetary policies, employing interest rate hikes as a tool to combat the rising tide of inflation.

Inflation and Interest Rate Hikes

While these efforts have not yet achieved the desired results, with inflation stubbornly persisting above target rates, the concerted actions demonstrate a steadfast commitment to steering the economic ship towards calmer waters. The recent statements from Federal Reserve Chair, Jay Powell, underscore the challenges faced by central banks in navigating this complex landscape.

Powell acknowledged the lack of progress in returning to the 2% inflation goal, despite solid economic growth and a robust labor market. This reality check suggests that businesses must brace themselves for higher interest rates to remain in place for an extended period, as the Fed seeks to regain control over escalating price pressures.

Post the Federal Reserve two-day policy meeting on April 30th and May 1st, the interest rates will remain higher for longer. There is no possibility of a ‘soft landing’ for the economy. This uncertain terrain poses unique challenges for businesses across various sectors, each grappling with industry-specific hurdles while simultaneously seeking opportunities amidst the turbulence.

Macro Outlook – By Industry

Enter the Service Providers (SPs) – the shining beacons who can guide businesses through these stormy waters. With their diverse skillsets, deep industry knowledge, and innovative solutions, SPs are uniquely positioned to empower enterprises to overcome obstacles and seize opportunities, even in the face of uncertainty.

  1. Consider the Software & Internet industry, where specialized AI, Generative AI, and Cloud Services are driving significant investments. While challenges exist, growth is expected to hit an impressive 7.3% in 2024, with the Asia-Pacific region leading the charge and Cybersecurity taking center stage. SPs can capitalize on this momentum by offering managed Security Services, addressing Data Sovereignty and Security concerns, and providing cutting-edge AI-as-a-Service solutions.
  2. In the Automotive sector, consumer mobility patterns are shifting gears, with a focus on fit-for-purpose and shared mobility solutions. Electric Vehicles and Autonomous Driving Systems are gaining traction, while Cybersecurity remains a top priority, particularly with the implementation of UN Regulation 155 mandating comprehensive Cybersecurity Management Systems. SPs can make their mark by contributing to Autonomous Vehicle Development, tackling vehicle security needs, and developing innovative Mobility-as-a-Service solutions.
  3. The Industrial sector is grappling with the need for resilient supply chains amidst geopolitical conflicts, while Smart Manufacturing, Data Analytics, and Digital Threads are essential for operational efficiency. With a projected growth of 6.9% in 2024 and Industrial Automation in Europe being a hot area, SPs can integrate Generative AI with Computer Vision, tap into the Industrial Metaverse, and develop solutions for manufacturers dealing with diverse product varieties.
  4. The Semiconductor industry is on fire, fueled by skyrocketing demand for AI and endpoint devices, with a projected growth of 7.6% in 2024. Europe is emerging as a hotspot for cutting-edge foundries, and advancements in Generative AI-powered chips and miniaturized packaging are driving innovation. SPs can secure a foothold by providing Semiconductor Design and Engineering Services, enabling custom chip development for smartphones, and supporting the shift to 3D packaging solutions.
  5. While the Telecom industry faces challenges such as higher compliance costs, lower consumer spending, and chip shortages, growth is still expected to hit 3.7% in 2024, with the Asia-Pacific region accounting for a staggering 41% of global 5G connections. Cybersecurity threats and the battle for AI control are keeping industry players on their toes. SPs can make a meaningful impact by supporting telecom infrastructure investments in the Asia-Pacific region, leveraging Generative AI and Automation for personalized services, and assisting in the adoption of sustainable RAN architecture.

To gain a deeper understanding of how SPs can help businesses thrive in this challenging economic landscape, this latest Zinnov study provides a macro outlook for 2024. The study examines the challenges and opportunities across various industries, providing invaluable insights into the industry-specific hurdles and highlighting the crucial role SPs can play in helping companies navigate these turbulent times.

Access the full study here: Zinnov's Macro Outlook 2024


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Founded in 2002, Zinnov is a leading global management consulting and strategy advisory firm, with a presence in 10 global locations. Over the last 22 years, Zinnov has partnered with Global Enterprises and Fortune 2000 companies across their value creation journeys to develop actionable insights – across revenue, talent, innovation, scale, and optimization. Zinnov enables companies to develop and optimize a global engineering footprint through center setups, technology and functional Centers of Excellence (COEs), portfolio optimization, partnerships, and real-time data/ insights – through its unique GCC Accelerator Platform (GAP) offering. This multi-lever approach helps Zinnov’s clients achieve higher R&D efficiencies, innovation, and productivity via an immersive and highly networked model. Zinnov’s expertise also includes advising global PE firms in asset shortlisting, target evaluation, due diligence, and value creation for their portfolio companies through a globalization lens.



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