The future of work in Greater China: less centralized, more automated.
- Nearly seven in 10 business executives in Greater China say the degree of business uncertainty they’re experiencing today is greater than at any time in their careers.
- Despite that sentiment, there is a striking degree of optimism in mainland China about growth expectations over the coming months.
- Cautious optimism is still on display in Taiwan and pessimism in the Greater Bay Area (GBA) was the most persistent in the survey.
- Remote working appears to be here to stay. More than three-quarters of survey respondent firms (76%) plan to implement work-from-anywhere practices during the next 12 months, leveraging capabilities such as cloud computing and mobility technology while a majority (77%) expect to increase “gig” or short- term workforces.
Today The Economist Intelligence Unit releases a first of its kind survey on managing business uncertainty in the Greater China region. As the health and economic impacts of the covid-19 crisis continue to disrupt business as usual, the pandemic may divert attention away from other longer-standing sources of uncertainty. Business leaders in the region were already grappling with heightened trade volatility, talent shortages, rapid technology advances and the ever-changing behaviours of consumers. Covid-19 pushed much of that to the sidelines but overcoming these challenges is still fundamental to business success. What the report, The art of managing business uncertainty: A future of work study for Greater China, demonstrates is that, if anything, the crisis has added propellant to existing trends, rather than freezing them in place.
While some businesses seem prepared to ride out the current crisis, making as few changes as possible, survey results suggest many others will make important shifts to their structure. About 70% of business executives surveyed said the level of uncertainty they’re experiencing today is greater than at any other time in their careers. To cope with that, cost-cutting, headcount reduction and consolidation of work locations are some measures being taken. But more telling for the future are changes business are making with a view to improving agility and scalability. Research shows greater use of temporary workers, more home- and mobile-working, a concerted push to automate more front- and back-office operations, and increased investment in AI, IoT and work-from-anywhere technologies. Businesses are reacting to long- standing forces in the business world; covid-19 in many cases is accelerating change for Greater China.
Over March and April 2020, The Economist Intelligence Unit surveyed 315 senior executives from around the Greater China region, including Hong Kong, Macao, Mainland China, and Taiwan.
Most industries in Greater China have been hit hard by the crisis, but some have fared better than others. Their different experiences might explain the stark contrast in executive outlooks across the four largest industries surveyed. Expectations for the next 12 months in the technology sector were most optimistic, particularly when it comes to revenue growth, about 94% of tech executives expressed confidence. Conversely retailers will see struggle; only 19% said they see business conditions improving.
Keeping with findings from other research that shows China’s second tier cities are experiencing rapid growth, much of the optimism in this new survey came from respondents in those types of classified locations; 62% of executives in second-tier cities had expectations of improving business conditions, versus 49% in top tier cities or 8% in the Greater Bay Area (GBA). The average overall expectations for improving business conditions in the survey was 39%; only 19% expected worse conditions with the rest seeing no significant change.
Jason Wincuinas, senior editor of The Economist Intelligence Unit, and editor of the report, said: “As the term “business uncertainty” in the title suggests, we were not sure what we would find when we asked executives in the region about the challenges they face today. Given current conditions, businesses were obviously primarily concerned about natural disasters and pandemics, which took the top spot in terms of worries. But they have not been distracted from the challenges that have been building over the past decade. China is a massive and diverse market so having the scale and flexibility to succeed in it is paramount. It turns out, the same kind of agility needed to succeed in a rapidly advancing market is also important to surviving a crisis like covid 19. For example, if a company was already looking at technological solutions to tallent challenges, that probably helped a transition to work-from-anywhere tactics that have proved essential for companies to maintain productivity during lockdowns. That kind of scalability and fluidity of staffing will probably become a permanent feature of work.”
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About the research
The art of managing business uncertainty: A future of work study for Greater China is an Economist Intelligence Unit report, commissioned by WeWork. It explores how management of companies in mainland China, Hong Kong, Macau and Taiwan view different types of uncertainty and the steps they take to address such pressures. The Economist Intelligence Unit surveyed 315 senior executives in 17 industries including technology and IT (19%), manufacturing (14%), financial services (14%) and retail (10%). The respondents’ organisations are roughly evenly split between large firms of over 500 employees (52%) and smaller ones with between 10 and 500 employees (48%). The respondents all hold senior roles: 52% of respondents are in C-suite and board-level roles, with the balance consisting of managing directors, vice presidents, heads of business units or departments and other senior managers.
About The Economist Intelligence Unit
The EIU is the thought leadership, research and analysis division of The Economist Group and the world leader in global business intelligence for executives. We uncover novel and forward-looking perspectives with access to over 650 expert analysts and editors across 200 countries worldwide. More information can be found on www.eiuperspectives.economist.com. Follow us on Twitter, LinkedIn and Facebook.
About WeWork
WeWork provides members with space, community, and services through physical and virtual offerings. Its mission is to create a world where people work to make a life, not just a living. As of 2020 first-quarter close, WeWork had 828 locations across 149 cities and 38 countries, as well as 693,000 memberships, including global enterprises. WeWork is committed to providing members around the world with a better day at work for less.
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