2023 Recap: Mostly a fond year to remember

From taming inflation to a surge of AI, 2023 had quite a few ups and some severe downs. Here's a quick recap of the year that was

Sandeep Das
Updated: Dec 22, 2023 02:50:47 PM UTC
A picture taken on December 15, 2023 shows the aftermath of recent shelling in Yasynuvata (Yasinovataya), Russian-controlled Ukraine, amid the Russia-Ukraine conflict. Image: Stringer/ AFP

As we come to the end of 2023, it is interesting to look back on the year gone by and the prevalent mood at the end of 2022. 2023 was the first year where COVID-19 concerns had largely receded from our daily lives, and a consumption boom, in line with the roaring 20s, was expected.

Did that pan out as expected? In this article, we look at the major incidents of 2023 and what might 2024 be the harbinger of.

Macro-environment was still the #1 factor for every business

2023 was one of those unique years which had two major wars during the same year—the lingering Russia-Ukraine conflict and the highly volatile Israel-Hamas war. The repercussions of both wars were expected to be on oil prices and, hence, inflation. But oil prices were relatively stable (Brent crude oil price hovered between $75-95 per barrel in 2023) and were primarily driven by conscious supply cuts by the Organisation of the Petroleum Exporting Countries (OPEC). While two active wars were ongoing, the US and China had an active 'cold war' on who would win the future. In October, the United States tightened export controls on semiconductor chips used for Artificial Intelligence and the equipment used to manufacture them.

The big news on every channel was that of inflation. The year started with inflation being a concern for every country. However, as interest rates kept steadily increasing, inflation in most countries seems to be under control again (~3 percent in the US in Nov, ~5.5 percent in India in Nov, -0.5 percent in China in Nov). As a result, there are increasing conversations about the US Fed reducing rates in the second half of 2024. In terms of growth, most of the leading markets are growing again. India is one of the fastest growing economies (~7 percent in FY 23-24), while the US is growing at 5.3 percent in Q3. In China, the government continues to play an active part in keeping a close check on tech moguls. Interestingly, there is optimism about the Japanese economy again after nearly two decades.

In terms of climate change, one of the most important topics affecting our generation, there has been mixed progress. There are consistent conversations about net zero emissions by 2050 and attempts to phase down fossil fuels, but the cost of funding and affordable technology lingers.

2023 was a mixed year for various businesses

For Indian entrepreneurs, 2023 witnessed a funding winter. Startup funding declined to a five-year low with $7 billion in 2023 compared to $25 billion in 2022. Both late-stage and early-stage funding in India has dropped by more than 70 percent since 2022. The poster child of Indian entrepreneurship, Byju's, was in the wrong reasons the entire year, suffering a $19 billion valuation loss from $22 billion to $3 billion

There was enough drama in the world of social media. Elon Musk-run X (earlier Twitter) got into spats with advertisers, layoffs and their moderation policies. Sensing an opportunity, Meta launched Threads but failed to live up to the hype after gaining 100 million users in the first few weeks.

While big tech was fighting over users, social commerce led by influencers continued to grow by more than 20 percent globally. For instance, controversial Chinese social media influencer, 'the lipstick king', continues to drive GMV over billions of dollars on various live-streaming platforms.

Meanwhile, consumers stepped out like never before. Travel boomed to unprecedented levels this year as everyone seemed to take vacations. In-person events like the IPL, the World Cup, and music concerts saw near-packed stadiums. Taylor Swift's Eras Tour became the highest-grossing music tour ever, surpassing $1 billion at the box office.

Also Read- India tech startup funding in 2023: Takeaways from a five-year low

Many retail and consumer-centric industries were under volume pressures and had to manage their pricing and mix to drive revenue growth. However, the rural consumer is finally starting to showcase signs of growth in the previous quarter after 3-4 quarters of subdued growth.

Sustainability as a theme in driving brand conversations is becoming more important. However, it is still far from being a top three buyer value for Indian consumers. Purpose-led marketing became the new buzzword as most consumer brands started leveraging it for communication. However, there was a lot of conversation within Unilever investors if focusing on purpose was coming at the expense of growth for the company. This debate will continue even in 2024.

Leading global oil giants Exxon Mobil and Chevron posted attractive numbers (not as good as 2022) but are in a consolidation phase, purchasing numerous assets this year.

Artificial Intelligence set the stage on fire

2023 was the year when Artificial Intelligence took centre stage. As a result of the AI boom, the big tech sector in the S&P 500 is up over 50 percent this year, while the overall S&P 500 is up 20 percent this year. There were concerns about ethics in AI with deep-fakes and scope for misuse, with tech leaders asking for the US government to step in to protect consumers from the risks of AI.

When there is AI, there is a soap opera drama with the firing and reinstatement of Sam Altman in Open AI. The drama didn't end up with just Open AI but also extended to the world of crypto after Sam Bankman Fried, founder of crypto exchange FTX, was convicted of multiple fraud and conspiracy charges.

2024: What does it have in store?

2024 will see two massive general elections—in India and the US. And that is likely to determine the macroclimate for these two economies. There is an increased sense of optimism as fears over a hard landing for the global economy are receding, with inflation coming under control for many leading economies. Artificial Intelligence will continue to grow disproportionately along with the concerns and fears that exist with it.

Also Read- From Kiara Advani to Travis Head, the most searched people on Google in India in 2023

Despite this optimism, there are signs of concern. Anecdotal evidence suggests there is a sense of doom. In India, placements at engineering and business schools are under pressure, with the urban youth seeming to be under tremendous stress. This might get aggravated in 2024 as domestic consumption slows down.

But to end on a positive note, 2024 also has the T20 cricket World Cup in West India and the US. Hopefully, India will finally lift that trophy after a title drought of over a decade.

The writer is the author of 'How Business Storytelling Works: Increase Your Influence and Impact'. Views are personal.

The thoughts and opinions shared here are of the author.

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