Woke corporatism has started to implode

By Matthew Lynn

We would all be working from home, occasionally travelling into a shared workspace in our electric vehicles to collaborate on some ESG-approved product launches, while popping out at lunchtime to graze on some plant-based meat.

There were many megatrends that were expected to dominate economic activity this decade. Each attracted vast sums of venture capital money and generated lots of excitement on the sharemarket, as capitalism was re-orientated towards a more caring, inclusive way of doing business.

Venture capital excess was chronicled in the show “WeCrashed’, about the rise and fall of WeWork.
Venture capital excess was chronicled in the show “WeCrashed’, about the rise and fall of WeWork.Credit: AP

Yet 2023 turned out to have been the year when so-called “woke corporatism” keeled over and died. One by one, over-hyped fads such as working from home and environmental, social and governance (ESG) have imploded. And it’s likely the system will be more robust as a result.

Looking back on the past 12 months, there have been some standout themes. Interest rates returned to more normal levels after 15 years of ultra-cheap money. China emerged from lockdown, and its path to global economic dominance no longer looks so clear. The US continued to outperform Europe, and Germany descended into what looks like a deep structural decline.

Nonetheless, something of equal significance has been happening under the surface. Woke corporatism has started to implode. Over the course of 2023, a whole series of over-hyped fads have faltered. Consider the shared workspace.

According to the corporate visionaries, the traditional office would soon be completely redundant, since we would all be on flexi-time, or “working from anywhere”, and all we would need would be a space we could pop into from time to time to catch up on a corporate wellness session before a “breakout yoga class” with our colleagues.

At its peak, the uber-cool WeWork, whose original tagline was “elevating the world’s consciousness”, was valued at $US47 billion ($69 billion) on the assumption that it was revolutionising office life.

Yet it this year filed for bankruptcy, with shareholders losing the bulk of their money, and many of its smaller rivals started to struggle.

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It turns out that most of us liked having our own space, even if it was just a beige cubicle, and didn’t really want to hot desk in something that looked suspiciously like a soft play area designed for two-year-olds.

At the same time, the working from home bubble has burst as well. Three years after the pandemic ended, many major companies have started insisting that their staff come back to the office at least three days a week, and often more.

Even firms such as Google, which create much of the software that enables home working, have demanded that its own people check in to work.

Meanwhile, Zoom, the company that capitalised most successfully on working from home saw its share price fall from $US490 at its pandemic peak to a low of $US59 in 2023.

What’s more, it was reported in 2023 that Zoom’s founder, Eric Yuan, had told staff at an all-hands meeting that he wanted employees to return to in-person work because video conferencing was making them too “friendly” and unable to build trust.

And take a look at ESG, a movement that demanded investors prioritise social targets over the seemingly more mundane matters of profits and returns on investment.

Zoom, the company that capitalised most successfully on working from home, saw its share price sink in 2023.
Zoom, the company that capitalised most successfully on working from home, saw its share price sink in 2023.Credit: Istock

Over the past 12 months, it has been in full-scale retreat, aided by the Coutts scandal involving Nigel Farage. Investors are abandoning it, with the money committed to ESG funds falling from $US339 billion to $US315 billion by the third quarter of the year.

How many people can take it seriously any more? The electric car, meanwhile, was meant to be taking over the roads. It was a cheaper and cleaner way of getting around. And yet, by the end of this year sales were slumping, with manufacturers offering bigger and bigger discounts to try and tempt wary buyers, and with giants such as Volkswagen shelving investment.

Only the Chinese manufacturers such as BYD, with cheaper vehicles, are still booming. The cost of insurance was limiting, charging remained as tricky as ever, especially over long distances, and there was growing evidence that all the minerals going into their production meant EVs were not as good for the environment as previously hoped. The bubble may have finally burst, with start-ups such as Volta forced into bankruptcy.

Next, plant-based food start-ups struggled. Beyond Meat and Oatly, which makes oat-based milk, both saw their share price fall. Perhaps no one really wants an overpriced soybean burger, and maybe the future is not necessarily vegan.

Finally, we were all meant to be abandoning X, the site formerly known as Twitter, in protest at the views of its new owner Elon Musk. And yet, while its value has fallen significantly in 2023, we are still “tweeting” our views, and competitors such as Threads, Mastodon and Bluesky were about as lively as a high street on Christmas Day.

There are technologies and trends that will make a real difference over the course of this decade. AI might well prove to be crucial to accelerating growth, while reformed economies in Africa and South America, led by countries such as Argentina, may start to dramatically expand.

But the over-hyped woke corporatism that has dominated the 2020s so far may be running out of road. Will anyone miss it?

Indeed, if companies can get back to making decent products at a fair price, and paying their staff and customers on time, and not worry about their “social purpose”, the system will be a lot stronger – and will generate far better returns as well.

The Telegraph, London

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