Since then, the economic consequences of the pandemic on supply chains and employment, rampant inflation, increasing interest rates, the bitter and vicious war in Ukraine and new zero-covid lockdowns in China have conspired to create a perfect storm in which growth forecasts are downgraded and risk in some parts of the world is being elevated. The strong bounce-back previously expected this year will be dampened and over the horizon in 2023, the clouds look even darker. At S⁴Capital we’ll trim our sails accordingly and won’t be blown off course. But navigation will, as ever, be challenging.

The global economy drives growth in our markets. The total market we address is worth between $2 trillion and $3 trillion: advertising media is approximately $650 billion; marketing services $550 billion; trade budgets around $700 billion; and digital transformation budgets another $500 billion. Overall, our markets probably grew by 15-20% in 2021, but the significant point is that nearly all that growth was digital. In media advertising, the increase in spending with Google, Facebook and Amazon alone was over $100 billion in 2021. At S⁴Capital our revenues grew by around 52% in 2021, and it looks as though the digital part of the industry will continue its growth trajectory over the next two or three years.

If anything, the pace of digital transformation may speed up when the economy slows down, because in tough times, the change agents inside companies are given more oxygen.