Annual Letter: 2021
I discuss three big trends from this year and what I look forward to in the year coming ahead.
Just like every big earthquake is followed by aftershocks, 2021 in many ways reeled from the events in 2020. Even after vaccination efforts and new anti-viral drugs, COVID remained impregnable. Invisibility of this enemy made us think that the worst was behind us. However, new variants and mutations confirmed that this is a long drawn out war with extraordinary implications for our lives and the world.
As the world tried to gain control from COVID, many undercurrents from pre-COVID era only became stronger. With so much that has happened, it begs the question - What did we learn from 2021?
“The Wheel of Time turns, and Ages come and pass, leaving memories that become legend. Legend fades to myth, and even myth is long forgotten when the Age that gave it birth comes again.” — Robert Jordan
The fall of Soviet Union exactly thirty years ago marked the start of United States-led unipolar world. USA dictated culture, economics, politics and security worldwide. However, events in 2021 including Jan 6 insurrection and Fall of Kabul confirmed that America is a power in decline. Beyond politics, rise of woke culture in U.S. and a public angst against “the establishment” show that changes underway are anatomical and permanent in nature. Questions are being raised for how long will United States still remain “the beacon of hope” for the rest of the world?
2021 also witnessed drastic changes in China’s strategy for future development. Deng Xiaoping’s state-led capitalism has become history and China has clearly moved towards government-controlled super-centralised surveillance state under Xi Jinping. China also made its global ambitions more clear in 2021 setting the stage for a prolonged Cold-War like conflict between incumbent and challenger powers and the start of discovery for a new world order.
No absolute control
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” — Mark Twain
2021 saw global economy attempt to recover from COVID-led devastation even as supply chain challenges created speed-breaks to a fast global recovery. To fuel this recovery, the Federal Reserve along with other central banks led the largest monetary expansion in the history. The exuberance that followed in public and private markets was unlike anything we have in recent past. Of course not without consequences. Inflation, initially believed to be transitory, remained elevated for the second half of 2021. As we enter 2022, Fed’s efforts to end current monetary expansion and to regain control will be extremely important.
We also saw a Cambrian explosion in crypto currencies in 2021. The decentralised experiments in finance showed new possibilities in payments & financial markets and challenged the traditional ways of doing business. As regulators around the world try to check crypto, 2022 is full of promise for decentralised finance.
Brave new world
“Actual happiness always looks pretty squalid in comparison with the overcompensations for misery.” — Aldous Huxley
More important than finance or politics is the cultural impact 2021 had on all of us. At the onset, 2021 seemed like the year we would return back to offices or restart travel again, but new variants kept us at bay. Sustained work from home and extreme skilled labor shortages lead to structural changes in most organisations. Workers responded with ‘The Great Resignation’ as they recalibrate their career choices in the new economy.
As a new generation of professionals enter the workforce in 2022, digital working habits and new economic realities will force organisations around the world to fundamentally rethink about their businesses, culture and visions in the brave new world.