It’s said that the only thing certain in life is death and taxes. And now, in a post-COVID world, it seems like uncertainty, complexity and volatility are predominant and ambiguity shrouds clarity. It may remind many of the VUCA phenomenon: Volatility, Uncertainty, Complexity & Ambiguity, which is quite a turbulent landscape. In 2024’s India, has VUCA gone beyond a theoretical construct? Maybe, it was never purely theoretical. Is it now our lived reality shaping the future of economies and businesses?What does it take to walk a path where the ground beneath our feet is constantly shifting? How much could the certainties of yesterday offer solace in the face of today’s and tomorrow’s uncertainties?
According to Cyril Shroff, Managing Partner at Cyril Amarchand Mangaldas, “After the end of the Cold War, the world was broadly divided into 3 blocs: the US or the West, Russia and its allies & random players, sometimes, backed by the US. Fast-forward to today, the world is still divided into blocs and it’s much more bipolar, with China being the new Russia, there are more nuances about who’s friends with the US and Russia or both. The algorithm for dealing with geopolitics has changed, which is the source of uncertainty in today’s world… The Internet and social media are relatively new phenomena, so technology has created an entirely new dimension, especially with the COVID-19 pandemic turning the world upside down, but also, creating a lot of opportunities”.
What about from a political standpoint?
Shroff remarks, “50% of the world’s population will go for elections in 2024. You’ll see a lot of world economies throwing out their governments to bring in new sets of policies and attitudes. So, it’s hard to predict what policies will be there. What’s, also, been building up for a while is a debate, which may have started during Trump 1.0, which is whether we’re in a deglobalizing world or a reglobalizing world, whether we should be diverging or converging and whether nations have misused American generosity. Thankfully, for India, due to smart political thinking and luck, we’re well-positioned, in terms of how to take advantage of the US-China divide. One of the things India has is political certainty and whether or not you like India’s Prime Minister, he’s a strong leader bringing stability and predictability, things which most nations are craving for. So, certain aspects of VUCA don’t apply to India”.
And what about the business realm?
“The current state of the business world is driven by VUCA. What’s on the mind of business leaders and political leaders is the world being at war. In this century, they’re not supposed to be at war; this was supposed to have come to an end in WWII. There are still wars which don’t have a predictable end… When it comes to dealmaking, there’s been a rise in governance conversations, with the philosophy creeping through private markets. On the public markets side, proxy advisors are front of line, almost being a gatekeeper of governance… Unfortunately or fortunately, we haven’t got class actions in India yet, but I don’t think that’s far away. In the meantime, there’s a lot of litigation between investors or funders and founders; this is investors asserting governance expectations… There’s, also, intergenerational succession, which comes with new attitudes or aspirations. These are people who are US-educated or UK-educated, have seen the Western world and have come with different mindsets. They may not be interested in the family business, but may develop their own venture… Data is considered the new oil with 1.4 billion Indians generating mountains of data, which could be a huge asset. This is why the world of Big Tech is fighting over it with regards to the right to export it or mine it”, states Shroff.
It’s said that since late 2022, the golden age of AI is underway. So, how is it shaking things up?
Shroff opines, “Generative AI seems to pose existential questions on humanity, like ethics, public policy, efficiency vs redundancy and more. Any knowledge-based organization is going to be deeply affected. Post-World War, organizations were shaped like pyramids. With the rise of outsourcing, they were shaped like mushrooms and now, they’re shaped like a mushroom: with a large base and a thin middle. This is because AI may replace the middle and impact the apprenticeship model of organizations. And because AI could be ensconced with the biases of the people who created it, when things go wrong, the question is who could be blamed: the AI, the owner, the coder, the user or the person who asked for the AI to be applied. So, there are ethical and liability questions at large”.
Shroff adds, “Other uncertainties include climate risk and climate litigation. If I were in a leadership position in a corporation doing business anywhere in the world, including India, which has a large environmental footprint, I would, very much, worry about climate litigation blowing a hole in my balance sheet”.
“Culturally, in India, in the last 75 years, we’ve moved from a business culture of forgiveness to permission. Now, when we have doubts, we go get permission. In terms of conducting businesses or doing a deal, don’t hit the ball on the line, hit it well within the line”, quips Shroff.
