Bespoke Business Development

Telcos that use responsible AI frameworks can unlock new revenue streams and spur long-awaited growth. Over the past decade, the telecom industry has faced one daunting challenge after another. Telcos have endured relentless competitive pressure from fast-moving technology companies that entered their core sectors of communications, connectivity, and data transport. In the hopes of igniting revenue growth, telcos have sought to reinvent themselves. They have created new tech-driven product offerings—from the Internet of Things (IoT) and software as a service (SaaS) to over-the-top (OTT) video streaming. They have also ventured into adjacent industries such as insurance, financial services, and healthcare to offer new B2C and B2B services. Some of those initiatives have been moderately successful. But the truth is that telcos still struggle to compete with nimbler and more highly capitalized tech companies. https://lnkd.in/eahypxFZ

Bespoke Business Development’s Global Resilience Survey reveals how leaders in advanced industries view the current landscape and highlights the challenges ahead as they manage uncertainty. The recent Bespoke Business Development Global Resilience Survey reveals some striking insights about the impact of disruptive trends on corporate sentiment within advanced industries. We surveyed more than 300 individuals in executive and senior-leadership roles across automotive and assembly, commercial aerospace, industrial and electronics, and semiconductors (see sidebar “Our methodology”). One significant finding: only 31 percent of leaders feel they are ready to meet the challenges ahead. Here’s a look at some of the most important findings, as well as a review of potential strategies for increasing resilience. Continued uncertainty, with short-term pessimism giving way to slightly more optimism The survey showed that leaders have a pessimistic outlook about their companies’ near-term prospects because of a combination of factors: macroeconomic forces, supply chain disruptions, people and workforce issues, capital and balance sheet considerations, geopolitical forces, energy prices, and low growth expectations (Exhibit 1). Respondents did find some reason for encouragement in trends related to rising demand, the potential unearthed by breakthrough technologies, and shifting customer preferences. https://lnkd.in/e9rhJUXJ

China’s fiscal stimulus will emphasize support for medium- and long-term growth rather than immediate jolts to household consumption and infrastructure spending. Fiscal stimulus will focus on supporting indebted local governments, increasing capital adequacy at big banks, digesting unsold housing inventory, and supporting consumption by disadvantaged groups. The leadership’s shift to more forceful stimulus is a tactical adjustment rather than a strategic one; industrial policy and national security remain the top priorities. China’s pending fiscal stimulus will focus on strengthening vulnerable local governments and state-owned banks, while measures to help household consumption will play a modest supporting role. That was the message from Minister of Finance Lan Foan’s remarks on fiscal stimulus at an unusual weekend press conference. Lan’s remarks may disappoint markets because he declined to provide a specific number for new fiscal borrowing this year, though that figure is likely to emerge when China’s mini-parliament convenes later this month. Despite this lacuna, Lan provided significant new details on the structure of the pending fiscal expansion. https://lnkd.in/dZCAgNJS

Fortune or fiction? The real value of a digital and AI transformation in CPG A new Bespoke Business Development analysis quantifies the impact that digital and AI can have on consumer goods businesses and where consumer-packaged-goods executives should focus their efforts. The narrative surrounding generative AI (gen AI), a moon shot, once-in-a-generation innovation, is that it could utterly reinvent how businesses—consumer-packaged-goods (CPG) companies among them—are run. CPG leaders are heeding the call. In a 2024 survey of CPG leaders,1 71 percent said they adopted AI in at least one business function of their organizations (up from 42 percent in 2023), while 56 percent said they were regularly using gen AI. However, no CPG player has truly scaled its gen AI and traditional AI capabilities. So far, CPG leaders have reported adopting gen AI at a lower rate than other industries, such as advanced industries or technology, media, and telecommunications. This may be because leaders lack answers to questions such as, “How much value will AI eventually create in CPG?” and “Where in the value chain will the value be concentrated?” We sought fact-based answers to these questions to help CPGs figure out where to focus and how fast to move. https://lnkd.in/eVPaYTPg

US micro-, small, and medium-size enterprises, like their global counterparts, struggle with productivity. But a win–win economic fabric connecting all businesses can maximize their potential. At a glance Micro-, small, and medium-size enterprises (MSMEs) are the bedrock of the US economy. They employ nearly six in ten workers, produce almost 40 percent of value added nationally, and grow into a meaningful share of very large corporations. MSMEs in the United States are only half as productive as large companies, compared with 60 percent in other advanced economies. Narrowing the productivity gap, which is equivalent to 5.4 percent of the US GDP, is particularly vital in an era of shifting global production. MSME performance varies across US states and metro areas. Some of the variation is due to sector mix, but overall, the performance of large and small businesses tends to go hand in hand, as local variations influence the productivity of all businesses, regardless of size. Interactions between small and large businesses are key to boosting collective productivity. Strengthening networks and collaboration with large companies—in supply chains, industry clusters, and customer–provider interactions—could help US MSMEs gain advantages of scale in technology, human capital, market access, and finance. https://lnkd.in/e2ehr6i6

Below is a summarized collection of insights that we have heard from Chief Sustainability Officers (CSOs) recently. Covering topics such as how global businesses are approaching sustainability strategies, responding to reporting requirements, addressing stakeholder feedback and communicating their priorities, these insights highlight the importance of sustainability across industries and the role of collaboration in driving meaningful change. https://lnkd.in/dSrJ4Rav

Welcome to this edition of the Weekly Political Compass from Bespoke Business Development’s political risk advisory team. This week, we are taking a closer look at Japan’s upcoming elections. Meanwhile, China’s finance ministry has promised to increase fiscal spending, Prabowo Subianto will be sworn in as president in Indonesia, a consequential presidential election and constitutional referendum will take place in Moldova, Chile confronts new challenges at the five-year anniversary of the major unrest that led to a political crisis, while results from last week’s elections in Mozambique are still pending. https://lnkd.in/ejCse-Vb

UK economic growth, falling inflation and wage growth have resulted in the recovery of household finances above 2021 levels. However, structural services inflation and higher interest rates present risks to sustained further consumer spending growth. The UK Economy Continues to Recover in 2024, but Services Inflation Remains a Challenge UK GDP is rebounding modestly Following a technical recession in Q4’23, the UK economy demonstrated better-than-expected growth in Q1’24 driven by greater services output and improvements in production activities. https://lnkd.in/eKF7YcBE

Shareholder activism in Japan continues to evolve at a rapid pace, as activist funds embark on new strategies and previously silent shareholders increasingly engage in dialogue with companies. Activist events in Japan were up 156% year-over-year in the first quarter of 2024 alone, already reaching 40% of the 2023 total¹. At the same time, private engagements between activists and management continue behind the scenes. This higher level of activity arises from an uptick in international investor interest, corporate governance reforms and pressure on investors for higher returns, among other factors. Without a doubt, Japan Inc. is seeing new trends emerge within its shareholder base, influencing how executives and boards approach investor engagement and corporate governance. Activists have performance and drive growth to add shareholder value. The approach itself is not new – it was originally coined more than two decades ago by Nelson Peltz, founder of activist fund Trian Partners, who achieved success using this strategy with PepsiCo, among others. https://lnkd.in/eFE3XseH

Doing More, Saying Less: Trends in DE&I Compensation Metrics Amidst the debate over corporate ESG and DE&I practices, Bespoke Business Development’s analysis of recent S&P 500 proxy filings reveals an interesting trend: the practice of including DE&I metrics in executive compensation is not only widespread, but increasing in prevalence. Contrary to headlines suggesting a retreat from DE&I pay measures, our findings indicate more companies have added DE&I metrics to compensation plans than removed them in 2023. However, a notable shift has occurred – many companies are disclosing less detail about the specific DE&I metrics and goals impacting executive payouts. This shift, likely a strategy to reduce backlash from anti-DE&I activists, clashes with investor demand for transparency and the trend towards increased disclosure that began before the inception of say-on-pay. As companies navigate this complex landscape, they must consider the governance and shareholder implications of altering their DE&I pay-related disclosures. https://lnkd.in/g6quCfix