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State Revival: The renaissance of a long-neglected stakeholder

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State Revival is one out of five trends identified by the Communications Trend Radar 2023. It focuses on the renaissance of the state both as a strong partner and as an antagonist of businesses.
Since the COVID-19 pandemic and the Russian invasion of Ukraine, the state is interfering more strongly through regulation as well as by financing. It has become a more influential stakeholder for many enterprises under conditions of uncertainty.

Communication leaders need to rethink the positioning of their companies in political debates. Apart from strengthening political affairs activities, activities of state actors must be monitored so that communicators can serve as primary political advisors to the board.

The state as the “new superstar”?

Following decades dominated by free market logic in the Western hemisphere, the relationship between the state and businesses has changed significantly in recent months. COVID-19, the Russian war in Ukraine, and climate change, as well as rising nationalism and protectionism in key countries have returned the state to the spotlight.

The trend State Revival describes precisely this resurgence of the state (e.g., governments, regulators, political parties, politicians) as a strong partner and antagonist of enterprises.

State Revival – The changing relationship between the state and the economy

The relationship between the state and business is in constant flux and can be viewed as a pendulum. After a long period of neoliberalism with almost no state intervention being the standard in the Western world, the pendulum is now moving back in the other direction towards more state control (neodirigism).

The state pendulum
The state pendulum

While debates often address the two extremes (or ways to break out of the pendulum), the idea of the pendulum shows that there are probably many realistic situations in between.

The growing relevance of political affairs

For companies, the state will become an even more influential stakeholder. Opinion building related to decisions in this realm, for example, through public affairs and lobbying, will be strategically more important than in the last decade. Two key developments underline this:

  • Lately, the state has once again been interfering more strongly with the economy. Be it through subsidies and financial backing for specific industries, regulation in terms of energy supply and wages, as well as by extending the social welfare system.
  • However, the state not only regulates, but also creates new demands and markets. Now it is not just a regulator but sometimes a customer, too. For example, the markets for vaccines, refugee housing and integration, and military supply have exploded due to huge state spending.

Such interventions are changing the rules of the game for branding as well as for corporate and marketing communications.

Christof Ehrhart (Bosch) on the importance of governmental relations
Christof Ehrhart (Bosch) on the importance of governmental relations

Recommendations for communication professionals

To help their companies to be in a good position for further action, communication leaders should observe three particularly relevant fields of action in the political sphere:

  1. Strengthening the role as political advisor for top management: Top executives will increasingly need information and advice on governmental affairs. For communication leaders, it will be worthwhile to strengthen corresponding resources. This will help to enact the important role as an internal political advisor, which is much more about listening to fragmented discourses and creating internal scenarios than about traditional lobbying.
  2. Repositioning companies in public debates: Communication leaders should raise the question why their company is indispensable for the public good or the overall system. It can also be helpful to be on the radar of politicians when it comes to the distribution of funding or public procurement. Thus, current stakeholder maps, communication strategies, and budget allocations need to be future-proofed.
  3. Building a relationship with the state on a global scale: The relationship with state actors will be particularly important to global companies. Communication leaders should strengthen functions such as governmental or public affairs in emerging markets as this can become a competitive advantage. But be cautious: Diverging perceptions of collaboration practices around the world can trigger role conflicts and reputational risks which requires strategic approaches.

About the study

For the third time the Academic Society for Management & Communication presented the Communications Trend Radar – an interdisciplinary and scientific study on the most important trends that will influence communication management in the near future. 

The study analyzes changes in the areas of society, management, and technology. For 2023, the research team identified the trends State Revival, Scarcity Management, Unimagination, Augmented Workflows and Parallel Worlds.

These trends were selected and scored on a scientifically sound basis, developed by a research team at Leipzig University and the University of Potsdam (led by Professors Stefan Stieglitz from Business Information Systems, and Ansgar Zerfass form Communication Management). More than 100 sources from research and practice were included. The study aims to support communication managers in setting the course and guide decisions.