Omicron’s Christmastime cameo underscores the difficulty of making predictions in this pandemic era. Nevertheless, FGH experts firmwide have identified trends across sectors that are likely to shape the events of 2022 (including but not limited to ”PARENTS GO FULLY UNHINGED).”
For our final edition of 2021, here’s what we’re watching as we move into the new year:
- CONGRESSIONAL GRIDLOCK: Even with Democrats controlling Congress and the White House, they have struggled to accomplish legislative goals both large and small. With the midterm elections at the end of 2022, it’s likely that the problem will get worse, not better.
- MIDTERMS AND BEYOND: The political process is on a short clock. Anything Biden hopes to pass after about March is very doubtful. The entire system is paralyzed and hostage to Trump, who will presumably not announce for 2024 until after the November 2022 election. Observers bet Democrats will lose one or both houses, so no one wants to take a risk— meaning the entire system is on pause.
- PROMISES TO PROGRESS: Two years after corporate commitments were made in DEI across many sectors, mounting pressure will fall on companies and leaders to demonstrate substantive advancements, and there will be dwindling patience among key stakeholders for inertia and excuses.
- RACIAL RECKONING TO RETRENCHMENT: But expect to also see significant backlash on DEI education and criticisms of “woke capitalism” in response to companies’ stances on divisive topics. We expect this movement will grow and opposition will intensify from government and private sectors as the nation moves into midterm elections where “culture wars” concerning policing and critical race theory issues will feature prominently on the ballot and in public debate.
- INFLATION: The administration is feeling the inflation squeeze as the president’s approval numbers have declined along with inflation spikes. They have doubled down on their messaging focused on market concentration in the sectors where we have seen higher inflation such as agriculture and food. Furthermore, the Administration has pointed to consolidation in agriculture markets – particularly the meat processing industry – as one of the catalysts of rising prices and urged Congress to hold hearings on concentration.
- WHITHER BIG TECH: New investigative stories and policymaker efforts proliferated this year showing the dangers of tech to mental health, the lives of children and teens, democratic norms, information hygiene and more—even while it’s clear virtual living is here to stay and potentially intensify if (when) the metaverse becomes a reality. These concerns collide starkly with the absence of a meaningful mechanism to rein in the platforms’ control over privacy, information flow and the overall narrative.
- CLIMATE SOS: With Build Back Better hopes dashed, it’s once again up to business and local government to step into the breach on climate action while congressional Dems and the administration regroup. And as climate-fueled extreme weather continues unabated, we may see greater pressure on lawmakers to act.
- RECKONING ON CRYPTO: The swirl of debate in Washington over the regulation of cryptocurrencies will come to a head in 2022, answering the burning question of how far regulators will go to knock down the wall between banking and the ballooning digital asset industry and bring the latter under their supervision. A lean too far left could stifle innovation, undermine U.S. competitiveness and threaten the supremacy of the U.S. dollar in the digital currency markets. A lean too far right could leave risk spiraling in the shadows. But punting indefinitely is increasingly a non-starter.
- UNION BOOM: A strong job market and the lingering consequences of the pandemic have driven a boom in union activity. An ongoing dispute at Kellogg, for example, has generated social media backlash and caused President Biden to weigh in. With nearly 200 large union contracts representing more than 1.3 million workers set to expire by the end of 2022, industry should be prepared for continued pressure from workers and scrutiny from the markets, policymakers and informed consumers.
- WE DON’T NEED NO EDUCATION: We haven’t even scratched the surface of understanding the long-term effects of COVID on kids’ learning— especially on disparities in learning. But emotions about education are already higher than ever in recent memory, whether over masks, school closures or what’s being taught in the classroom. Parents’ unprecedented visibility into their children’s lessons, along with highly toxic and suspicious political divides, combine to send debates over curriculum— including around race and age-appropriate material— to white-hot levels and into political races up and down ballots.
- IN-PERSON RETAIL, RIP: The gradual move from in-person to online shopping was accelerated during the pandemic and will continue in 2022. Larger retailers, facing severe supply chain issues, will encourage that move as they pull an increasing number of items from their shelves. Smaller stores, on the other hand, will be left highly vulnerable to shifting consumer habits and continuing COVID waves.
- R-E-S-P-E-C-T: Expect to see more leaders talking about respect. The new German Chancellor Olaf Scholz won by running on a message of dignity for all workers, providing a template for how the center-left can turn back the tide against populism. With voters sour on big business– and employee activism rising–large companies need to redouble their efforts to demonstrate respect and dignity, no matter the role.
- AND FINALLY: 2022 will be the year that we at FGH and our newly merged partners at Sard Verbinnen truly come together as one merged firm, with combined practice groups in 25 offices across the globe under a new brand. Look for our new name to come in the new year!