New world disorder
The post-pandemic economy is beset with anxiety and uncertainty, forcing rapid corporate reforms, write Post reporters
The world is likely to become brittle, anxious, non-linear and incomprehensible, posing new challenges to businesses after the pandemic, says an industry association. Known by its acronym BANI, the new world is confronting entrepreneurs with uncertainties and forcing them to adopt various solutions to cope, ranging from creating partnerships to devising short-term strategies.
FROM VUCA TO BANI
As the world enters the age of BANI, replacing its predecessor VUCA, which stands for volatility, uncertainty, complexity and ambiguity, more complicated circumstances will affect people, said the Federation of Thai Industries (FTI).
“VUCA is being disrupted by BANI at a high speed and with strong impact,” said Kriengkrai Thiennukul, chairman of the FTI, referring to the two acronyms that are widely used in a military context.
VUCA has been dominant since the 1980s, while BANI has spread since the world was hit by the Covid-19 pandemic in early 2020, alongside growing concerns over climate change.
In the BANI world, households and businesses are likely to become more confused and unable to easily figure out how to deal with changing situations, said Mr Kriengkrai.
The brittleness of the world is reflected through surging inflation and higher interest rates. This is expected to lead to a recession, he said.
The World Bank has warned of a global recession next year after central banks raised rates in response to high inflation.
Anxiety is another key element of BANI, mainly stemming from worries over the impact of various kinds of conflicts between countries, said Mr Kriengkrai.
People are familiar with the US-China trade war as well as the Russia-Ukraine war, but there are other conflicts, many of which are linked to competition, he said. Some of these conflicts are about technology or currency tussles, said Mr Kriengkrai.
The world is also becoming more non-linear, which in this context is related to complex systems. In innovation, there is no straight route from A to B, but there are detours, dead ends and unexpected outcomes.
Some people link non-linearity with the butterfly effect, or a chain of cause-effect relationships started by a small event that can produce highly unexpected and disruptive consequences.
He envisions non-linearity in an environmental context. Climate change, for example, can lead to severe droughts, floods, and the displacement of people on a previously unimaginable scale.
The world is also becoming incomprehensible, following a series of disruptions, said Mr Kriengkrai. Digital disruptions change the way people live and businesses work, with some forced to shut down.
PARTNERSHIPS NEEDED
Chookiat Rujanapornpajee, chief executive of SETlisted electronics vending and billing machine provider Sabuy Technology, highlighted the importance of an adaptive mindset, scalable operations, and partnership ecosystems as key reforms needed to cope with unpredictable threats in the BANI world.
He said the global business landscape has been changing rapidly, driven by digital disruption, the pandemic and new business ecosystems.
“To cope with all possible disruptors, businesses have to operate with the highest potential, optimise efficiency, and run operations at the lowest possible costs. Management and employees need to realise the need for adaptation,” said Mr Chookiat.
He said businesses in this era should not operate alone, as partnerships and tie-ups are needed to benefit each party.
“Alliances or partnerships are the best option to combine strengths, reduce operational costs, synergise for scalability, and share resources in terms of assets and manpower to add more value,” said Mr Chookiat.
He said Sabuy’s business ecosystem involves 55 affiliated companies, including 15 firms whose major shareholding stakes are held by Sabuy.
The company is pushing for all businesses to match humans’ basic needs, including health, wealth, work and leisure, through both offline and online platforms, said Mr Chookiat.
He stressed that conglomerates in the new era will not have to make heavy investments on their own, but should opt for a new synergistic business model to share resources and add value through partnership ecosystems.
SHORT-TERM AND INCLUSIVE PLANS
The hard-hit tourism industry learned from the pandemic business could be disrupted overnight when consumer confidence was shaken by lifethreatening factors.
Chamnan Srisawat, president of the Tourism Council of Thailand (TCT), said private tourism operators needed to shift towards short-term plans as well as aim for sustainability across all dimensions as Thailand approaches the BANI era.
He said with an uncertain future, private operators should not plan too far ahead, instead adjusting to a shorter time frame, such as a quarterly basis.
Mr Chamnan said the most important factor is a shift towards sustainability and balance in the market by introducing more inclusive benefits for all.
The tourism industry should benefit all businesses, whether large or small, and cover every city, not only a few clusters in major metropolitan areas.
Development should not have one priority location, as happened with the Phuket Sandbox scheme, he said.
Mr Kriengkrai promoted the importance of the bio-, circular, and green (BCG) economic model as a way of dealing with BANI, and Mr Chamnan agreed the model could play a significant role in the tourism industry, with TCT already starting to move in this direction.
TCT’s latest BCG project includes the establishment of pilot local community tours across 20 provinces in northeastern Thailand, Mr Chamnan said.
He said human resources also need to quickly adjust in terms of skill sets, which could be achieved by offering knowledge to employees.
In addition, technology in Thailand still lags behind competitors in Asia and Europe, said Mr Chamnan.
He said Thailand should have a single digital platform where the government acts as a host, gathering all related organisations together, such as the Digital Economy and Society Ministry, Digital Economy Promotion Agency and private operators, to offer seamless services in one place.
SUFFICIENCY ECONOMY
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, said to cope with new threats in the BANI world, Thai businesses should adopt His Majesty King Bhumibol Adulyadej’s sufficiency economy guidelines for running their operations.
“We have to first stand on our own two feet and stay self-reliant as much as possible, building up immunity to reduce risk and anxiety, while managing various uncertainties to curb brittleness,” he said.
To build up companies’ strength, the business sector must also know how to connect the dots to underline cooperation and link with networks of communities, organisations, the government and people, said Mr Sanan. This will help to reduce the problems of non-linearity and incomprehensibility, he said.
‘‘ The brittleness of the world is reflected through surging inflation and higher interest rates. This is expected to lead to a recession. KRIENGKRAI THIENNUKUL Chairman, Federation of Thai Industries