2024 was a year that challenged the status quo.
But amid the political chaos, the way we do business saw some dramatic shifts—from Volkswagen’s annus horribilis, despite topping the Fortune 500 Europe, to the meteoric rise of AI.
We’re doing our own future-gazing this holiday season, looking at the worlds of big business, luxury and tech across Europe, and how these will all soon change and evolve.
Here, our London-based team of reporters, editors and contributors looks ahead, predicting how our world will change in the upcoming year. Let’s dive right in.
Employees will lead an AI revolution
Alex Wood Morton, Executive Editor, Europe, Fortune
How many times have you used ChatGPT to summarize a document? Or help you with drafting a report at work? There’s an arms race out there between giants like OpenAI, Anthropic and Perplexity, who are happily crunching through chunks of corporate data–whether CEOs and CTOs like it or not.
At the end of 2024, Superstar analyst and venture capitalist Benedict Evans predicted AI is “eating the world” at Slush in Helsinki. He referred to the meteoric rise of AI both in terms of awareness and how many of us are actually using (or at least trying to use) the technology in our everyday lives.
AI’s rapid rise presents opportunities but also some major headaches. None more so than the risk of employees using AI-powered tools at work, under the radar of the company’s tech teams.
Just like back in the early 2010s, when employees shunned their BlackBerrys and brought their own devices (iPhones), it was the workers who led the revolution.
AI’s software-led rise reminds me of what happened with Slack back in the 2010s. Inspired by the tech startups I was writing about at the time, I first started using the collaboration tool in my newsroom in 2015. Slack’s growth was unlike anything before it, because employees could sign up with their work email, and become evangelists by inviting colleagues without any sign-off from IT. It was a ground-up revolution, not a top-down change.
…it was the workers who led the revolution.
Slack’s popularity grew so fast that companies were forced to embrace it, for fear of losing control over important company data and documents being circulated across a third-party platform.
The same is happening with AI today.
It’s a case of deploy or die. When it comes to AI, leaders will be forced to learn to take the lead from their own employees. If they don’t, they risk being left behind.
Read more from Alex on Fortune. He’s given up on Twitter and can be found on LinkedIn here.
Green fatigue: The declining popularity of the ESG agenda
Oliver Smith, News Editor, Fortune
While the finance industry will undoubtedly continue touting its green credentials in 2025, I predict that ESG (environmental, social, and governance) investing will face a quiet demise.
The reasons are clear. Investor enthusiasm for ESG has waned significantly. A recent survey of UK private investors revealed that fewer than half now consider ESG factors in their decisions—down from two-thirds in 2021. In parallel, 2024 is on track for record outflows from ESG funds after the sector struggled to deliver competitive returns.
This shift can largely be attributed to underperformance during 2022 and 2023, which coincided with soaring oil prices driven by Russia’s invasion of Ukraine. Ironically, traditional energy stocks subsequently flourished during this period, eroding confidence in ESG strategies that avoided them.
But why is 2025 likely to accelerate ESG’s decline? Two key factors stand out. First, ESG has become highly politicized. The anticipated return of Donald Trump to the White House, alongside key figures like Elon Musk—an open critic of ESG—will add considerable headwinds. Trump’s public disdain for offshore wind, for instance, has already sent shockwaves through the sector, with European renewables giant Ørsted seeing its share price tumble.
Second, regulatory scrutiny is tightening. The EU’s Sustainable Finance Disclosure Regulation and similar measures are increasingly challenging fund managers to justify ESG claims. In response, many are quietly removing ESG labels from their products altogether, opting for less controversial branding.
Against this backdrop, the ESG label risks becoming more of a liability than an asset. By the end of 2025, I expect ESG to fade further into the background if not vanishing entirely, driven by political opposition, regulatory challenges, and continued investor skepticism. Green fatigue may prove irreversible.
Read more from Oliver on Fortune. He can be found on LinkedIn here.
The world’s biggest brands will go back to basics
Prarthana Prakash, Europe Business Reporter, Fortune
The retail and luxury world was on a tear during the pandemic, but the recent growth rate has been glacial at best. Weak demand from China was to blame for much of it, so the much-awaited stimulus measures could finally turn the tide for retail.
Except, it might not.
There will be a slight revival in European consumer spending next year, but people won’t put their money in the same places anymore. The fight for eyeballs and a share of individuals’ wallets will intensify, forcing companies to default to the basics.
One company that figured out its forte early on and stuck to it, unfazed by competition, is Hermés. That’s the company I’ll be watching as I expect rivals to mimic some version of the French company’s approach.
The world’s biggest consumer companies, like Nestlé, are already doubling down on what they do best as they enter 2025. Since the nostalgia wave has captured us all in one way or another—such as the Oasis reunion and Y2K fashion—falling back on reliable, classic staples could crown 2025’s winners.
Read more from Prarthana on Fortune. She can be found on LinkedIn here.
Oliver Blume has the toughest turnaround in Europe
Ryan Hogg, Europe Business Reporter, Fortune
It may sound like fresh doom-mongering about the faltering German economic engine’s biggest cog. But Volkswagen, and its CEO Oliver Blume, should expect more pain in 2025.
The joint CEO of Porsche and Volkswagen chief will ring in 2025 with much less certainty about his position than he did a year ago, and for good reason.
Volkswagen’s CEOs haven’t had a long shelf life since 2015’s Dieselgate scandal ended former boss Martin Winterkorn’s eight-year tenure at the automaker.
Volkswagen, and its CEO Oliver Blume, should expect more pain in 2025.
And Blume just needs to look at the struggles of his predecessor, Herbert Deiss, to understand the potential precarity of his position in 2025.
Diess struggled to compete with rising competition in China, faced hiccups in the electric transition, and was outmaneuvered by Volkswagen’s works council, leading to his ousting in 2022, three years ahead of schedule.
Each of these problems has only intensified since Blume took the helm two and a half years ago.
Volkswagen’s market share has fallen in China, while, like many automakers, the group has grappled with a sluggish adoption of EVs.
Some factors have been outside Blume’s control. He took over at Volkswagen five months after Russia’s invasion of Ukraine, which caused devastating energy cost spikes in Germany and plunged its manufacturing sector into a years-long recession.
But Blume hasn’t helped himself in his public battle with unions. The CEO was reportedly booed as he addressed workers in December, making a PR blunder by arguing Volkswagen management didn’t operate “in a fantasy world.”
Blume and the Volkswagen leadership are reportedly softening their stance on unions’ hardlines, including the company’s first ever German factory closures.
However, too many concessions in his battle with workers would see Blume struggle to deliver the €10 billion in cost cuts Volkswagen promised last year. An unfavorable view of the situation paints a lose-lose scenario for Blume, one that might cost him his job in 2025.
Read more from Ryan on Fortune. He can be found on LinkedIn here.
We’ll learn to love over-the-top accessories, double denim, yellow and jelly shoes
Aslesha Mehta, Production Editor, Fortune
With the new year comes new fashion trends. From new shades of yellow to double denim, bag charms and hair accessories—fashion in 2025 emphasizes both practicality and glamour.
Bag charms were among last year’s most popular accessories, and their playful, personalized style will shape accessory trends in 2025. Coach covered its bags in cherries and mushrooms and Loewe incorporated chains and ropes in 2024. Aspinal’s bee-logo keyring and Ami de Coeur’s keyring can also add sparkle to one’s spring bags—on a budget.
Denim is the crowning jewel found in everyone’s wardrobe. Celebrities such as Sydney Sweeney and Bella Hadid have shown how it’s done, and on the runway, Marques’Almeida showcased a variety of different denim washes during London Fashion Week in 2024. Highsnobiety also emphasized the versatility of double denim and the ways in which it can be styled, from vintage-inspired outfits to modern interpretations.
Yellow is the new black. Pastel colors such as yellow and baby pink dominated wardrobes in 2024 and the vibrant shade is expected to turn heads this coming year. According to Heuritech, the vanilla yellow trend is expected to grow by 11%, while saffron yellow is projected to rise by 6% from April to June, compared to past years.
Jellies are the controversial shoe that can take you back to ‘90s footwear nostalgia—they’re comfortable, versatile, and will protect you from blisters. They were the sandals that dominated Mary-Kate and Ashley Olsen’s The Row summer show held in September 2024 in Paris. The footwear comes in an array of silhouettes including ballet flats, heels and sandals.
Read more from Aslesha on Fortune. She can be found on LinkedIn here.
‘Reasoning’ will dominate debate over AI’s business impact in 2025
Jeremy Kahn, AI Editor, Fortune
If “agentic” was the AI buzzword of 2024, “reasoning” will be the term everyone is talking about in 2025.
Reasoning models are designed to solve problems that involve a series of steps. As a result, they are well-suited to solving logic puzzles, mathematical questions, coding challenges, and scientific queries. Their step-by-step output also makes them well-suited to orchestrating AI agents—systems act on our command, using the internet or other software, rather than simply generating text, images, or sound. In fact, without reasoning models, AI agents are limited in what they can do.
OpenAI debuted a preview version of the first of these models, o1, earlier this year, and in early December released the full version, while also previewing even more capable model, o3. But, as OpenAI’s competitors follow suit, next year will be the year businesses begin to adopt them—or not. Right now, these reasoning models are fiendishly expensive, so companies will need to think hard about whether it makes economic sense to use them.
The advent of reasoning models will deepen the emerging divide between AI haves and have-nots. In every industry, wealthier companies have been rushing to embrace AI, sometimes even where the return on investment is not apparent. Others, wary of the expense and afraid of the risks, have been slow to jump on the trend. But early adopters are now figuring out how to integrate AI into their workflows, a process that takes time and a willingness to experiment and fail, and they are now poised to reap the benefits of being precocious. These same companies are also best positioned to take advantage of the new reasoning models. Late adopters will find themselves falling further and further behind.
Reasoning models work differently than the previous generations of large language models (LLMs). They provide better answers if given more time to “think” about a prompt. But this upends the way both tech companies and their customers have traditionally thought about software. Software used to have a marginal cost that approached zero. Once programmed, you could make endless copies, at almost no cost, and they all performed identically. This is what gave software companies such great profit margins. It is also why corporations could buy a license for software and then know what the cost of that software would be for the year.
With these new reasoning models, that’s not true anymore. Now the same AI model will provide different responses depending on how much money a company is willing to spend on a given response from the model (because money equals thinking time.) That will fundamentally alter the way tech companies need to think about selling their software and the way businesses budget for it.
Read more from Jeremy on Fortune. He can be found on LinkedIn here.
Booming air travel demand likely to clash with overtourism pressures, the climate crisis, geopolitics and a lack of aircraft
Alex Ledsom, Fortune Contributor and Global Travel Writer
Air travel is set to break all records in 2025. The International Air Transport Association (IATA) predicts that in 2025, airlines will transport 5.2 billion passengers, the most ever. While good news for the travel industry, brought to its knees during the pandemic, it’s likely to clash with three ongoing issues from 2024.
Firstly, plane manufacturers are struggling to deliver new aircraft orders, which is necessary to keep up with travel demand and would make fleets more reliable and help to improve efficiencies. There is also a global shortage of spare parts. This lack is forcing airlines to lease aircraft and is sending costs upwards. It also means that airlines are rescinding plans to reach net zero carbon emissions. Older planes are more inefficient, more expensive to run, and cannot use Sustainable Aviation Fuels.
Secondly, there is increasing pressure on tourist hotspots that simply cannot cope with demand. Overtourism has been an incendiary topic in many locations, creaking under the unrelenting influx of cruise ships, daytrippers, and digital nomads. This was exemplified in the summer of 2024 by locals firing water guns at tourists in Barcelona holding ‘Go Home’ placards, the entrance fee in Venice, and hunger strikes in the Canary Islands. These are issues that will be exacerbated in Europe by the climate crisis.
Finally, the current political uncertainty in Europe and the Middle East may be compounded by the change of U.S. administrations in January, forcing airlines to navigate new airspace restrictions and changing the incentives for producing more sustainable aircraft and fuel.
Read more from Alex on Fortune. Alex can be found on LinkedIn here.
The end of European globalism–and the return of a “stagnation” mindset
Peter Vanham, Editorial Director, Leadership, Fortune
Thirty-five years after the Fall of the Berlin Wall, Europe will go “back to the future”, and not in a good way. As Trump takes office, European Fortune 500 companies will likely be squeezed between the United States which forces tariffs on imported goods and services, and Chinese companies dumping their goods in the European market.
It will leave the European Commission and other governments (for example in the U.K., Switzerland and Norway), with no other choice than to revert to protecting their domestic markets as well, either by imposing their own tariffs on imports, or by doubling down on industrial policy in support of their own companies, or, quite likely, both.
Thirty-five years after the Fall of the Berlin Wall, Europe will go “back to the future”, and not in a good way.
The short-term result may be that European companies become more European again, producing goods and services for the same markets they are consumed in, and being able to stop the bleeding of market share. But in the longer run, it means an end to Europe’s highly globalized companies, and an end to globalism as the leading political and intellectual stream.
Whether it will lead to a more sustainable and prosperous European economy, remains to be seen. But what we’re likely to see in the new year is a further slowdown in European economic activity, and with it, a growing mindset of stagnation among Europe’s consumers, workers, and entrepreneurs. It’s not a “back to the future” to be ecstatic about.
Read more from Peter on Fortune. He can be found on LinkedIn here.
Shopping will become sensory
Andrew Busby, Fortune Contributor and Retail Analyst
2025 will be the year when we once again fully embrace retail stores, however, this time, with renewed expectations.
In its annual Future Consumer Index of 23,000 people across 30 countries, EY found that 57% of consumers want to see and touch products before they purchase them.
It will be the year when retail begins to align with our expectations and deliver the kind of immersive, sensory experiences we’ve long been anticipating. Some great examples exist today, the IKEA pop-up in London’s Oxford Circus, the Banana Republic store in Manhattan’s SoHo district, or the EE Studio in London’s Westfield shopping center. All three have something in common; they draw us in, stimulate our emotions, and ignite our curiosity.
[2025] will be the year when retail begins to align with our expectations and deliver the kind of immersive, sensory experiences we’ve long been anticipating.
And the good news is that we should expect more retail brands to use their stores, not merely as a means to transact with their customers, but to fully engage with them. A world of discovery awaits, and it seems that retailers are ready to take us on that journey.
Andrew can be found on LinkedIn here.
We’ll give up the pub in favor of group exercise
Amber Middleton, Fortune Contributor
2024 was the year of sprinting, jogging and running—and 2025 is going to be even bigger.
A world record-breaking 840,318 people entered the ballot to get a place in the 2025 London Marathon, smashing the previous year (and previous record) of 578,374 applications.
Shorter distances were also favored, as 790,000 people downloaded the NHS Couch To 5K app in 2024.
But running became more than just a way to keep fit, it became part of our lives.
Rather than meeting down the pub, friends began meeting for a 5k jog along the beach. And rather than heading to Hinge, singletons partnered up at run club.
The obsession with running—and the social aspect—is only expected to increase in 2025.
Last month, Strava’s annual year in sport report found there was a 59% increase in running club participation globally in 2024, with 58% of users surveyed for the report stating that they had made new friends via fitness groups.
We expect to see more of this in 2025—particularly a rise in the more niche running clubs: all-female running groups, LGBTQ running groups, run clubs for minorities, for parents and in specific professions or for particular interests and additional hobbies, such as musicians. These are also slipping into worklife with a resurgence of workplace run clubs and team sports popping up.
We’ve seen this health kick and running interest trickle into all areas of our lives—even dating. We’ve seen run clubs hosted by dating app Thursday, as well as Runna joining forces with Tinder to promote active dating events.
And, according to Strava, one in five Gen Zs surveyed for their annual report went on a date with someone they met through exercise in 2024.
The social aspect of running will trickle into similar sports and industries too. In 2024, we saw a rise in Hyrox events, competitions that combine different fitness activities including running, weight-based activities, ski-ergs, sleds and more.
These gym-based activities were once traditionally done solo, but now we’re seeing an increase of groups participating—expect this to just get bigger. We will see more group exercise and less pub-based hangouts as we’re all making healthier choices.
Read more from Amber on Fortune. She can be found on LinkedIn here.
