Navigating 2024: Expect the unexpected, and shape it

This article was published in Top1000funds.

At this time of year our industry sees a plethora of outlooks covering the world through an investment lens zooming in on inflation, interest rates, geo-politics and markets. Here I take the less common lens that zooms out on the big picture issues which through the power of inter-connection increasingly shape our investment world.

In the ever-evolving landscape of the global stage, the year 2024 holds promise, challenge, and a myriad of unforeseen events. F. Scott Fitzgerald’s notion of intelligence, the ability to hold two opposing ideas and function, resonates as we anticipate both the expected and the unexpected.

As we delve into the coming year, three key focal points emerge, each demanding our attention and thinking ahead: the ascent of systems thinking, the critical understanding of tipping points, and the growing nexus between an increasingly polarised society and new technology that is fostering a destructive post-truth zeitgeist.

Systems thinking: beyond the parts to the whole

The call for more profound systems thinking marks a paradigm shift in how we approach complex challenges. Peter Senge’s wisdom[1] encapsulates this approach: seeing wholes instead of parts, understanding interrelationships rather than isolated entities, and working with patterns of change rather than static snapshots. In this era, success for the investment organisation hinges on comprehending and navigating the broader systems within which we operate.

As we embrace this holistic mindset, a shift in culture and learning becomes imperative. It’s about moving from zero-sum mentalities to positive-sum perspectives, going broader instead of deeper, and fostering collaboration that transcends individual success. The acronym VUCA — Volatility, Uncertainty, Complexity, and Ambiguity — becomes a guiding principle for cultivating vision, understanding, collaboration and adaptability in an ever-changing world.

Expanding our gaze to encompass Earth and social systems is crucial. Anthropogenic changes have elevated the significance of Earth systems, while increased interconnectedness has underscored the importance of social systems. Understanding these interconnected systems is paramount, as their intricacies hold the key to addressing the increasingly complex business and geo-political challenges.

Tipping points in climate and social dynamics

Tipping points, the moment where change becomes unstoppable, demand our attention. In climate systems, the Global Tipping Points[2] report to COP28 warns that harmful tipping points pose grave threats to our planet’s life-support systems. And they put forward social tipping points as possible defences. We should remember that some tipping points can be positive.

The scientists’ lens is based on data and analysis and a passion to discover truths. This is one segment of our society that deserves respect for its judgements. Look out in 2024 for more influence from climate scientists. Investors need to show more imagination to gauge the power of breaches to Earth system boundaries and understand their effects on the resilience of our financial system.

At the same time, Malcolm Gladwell’s concept of social tipping points[3] underscores the transformative power of ideas and trends once they reach a critical mass. The Global Tipping Points report advances the potential in positive tipping points like the Electric Vehicle transition shaped by a combination of social, financial, governance and technological forces. The pin-up here is Norway where these factors were aligned – last year 90% of new cars sales there were electric. Marshalling these multiple influences is pivotal for shaping resilient societies and resilient financial markets.

Post-truth realities and navigating the misinformation era

The fusion of technology and human influence has given rise to post-truth landscapes, where appeals to emotion and personal beliefs often outweigh the trust in objective facts. We still have significant climate change scepticism despite the overwhelming weight of scientific evidence.  This erosion of trust in institutional truth-telling is fuelled by new media technologies amplified by AI and an over-promotional culture. Distinguishing truth from untruth becomes an increasingly complex task, exacerbated by the rise of deep fakes and misinformation.

Truth-seeking though remains a powerful force through the human values of humility and curiosity and the aptitude for critical thinking. This lens is what is needed to build the accurate belief about reality that is the essential foundation for any good outcome.

While much of the world still strives for truth, the fusion of different values, misaligned social media and the impact of technology threatens to pull us in the opposite direction. Vigilance is paramount, especially in the context of significant 2024 elections, where the spectre of deep fakes looms in a world where our AI guardrails seem too flimsy to protect the integrity of the system.

Navigating 2024: conclusions and actions

As we navigate the complexities of 2024, the interconnectedness of systems becomes evident. To thrive in this intricate web, embracing systems thinking, recognizing tipping points, and confronting post-truth realities are essential.

And applying systems thinking tells us that collective action across these areas is a multiplier to good outcomes. Being joined-up across people, organisations, countries, and thinking has never been more important.

By putting forward the right vision, understanding, collaboration and adaptability, we can foster a future where the test of our mettle lies not only in expecting the unexpected but also in shaping it.

Roger Urwin | Thinking Ahead Institute and WTW

January 2024

[1] Peter Senge wrote one of the most influential books on systems theory in ‘The Fifth Discipline’.

[2] The Global Tipping Points report was written by a global consortium of scientists led by Professor Tim Lenton from the University of Exeter.

[3] Malcolm Gladwell wrote ‘Tipping Points’ in 2001.