The year of the Dragon is supposed to be a year for ambition. If you believe in the predictive nature of the zodiac, then this is a year to launch innovative new businesses and product lines, to step forward with new strategies for expansion and growth, to make big plans and take big risks. It's said that money will be abundant and business will boom in this zodiac year, which is exactly what everyone hopes for after the pandemic and the resulting economic slump.

But such ambitions and risks always come with a downside, and the year of the Dragon is known for magnifying not only successes but failures as well. Plans that don't work out become disasters. Missed targets plunge all the way into the red and trigger business collapse. It may be a self-fulfilling prophecy: the bigger the bet, the bigger the potential payoff but also the greater the loss.

What might we look forward to this year?

Unfortunately, the downsides may significantly outweigh the upsides in 2024. The World Economic Forum already warned last month that the global economy is likely to weaken further, and advanced economies in particular will see poor conditions in the labour market.

AI is exacerbating this by creating an increasing dichotomy between jobs. The International Monetary Fund observed that 40% of jobs worldwide are exposed to AI by now, with the number increasing to 60% in advanced economies. People in those exposed jobs urgently need to reskill and upskill to move to new roles or even just secure their positions. It's really not a good time to take risks on employment.

As for business growth and expansion, the current environment of high interest rates is keeping investments low, meaning that businesses' access to capital will be constricted. The labour market is not conducive either. WEF data indicates that more than half of all businesses worldwide are being stymied in their growth and transformation efforts by lack of local talent. Even with reskilling and growth in global digital jobs – potentially providing businesses with access to global talent pools – it will be years before the gap is meaningfully bridged.

On top of all this, climate change is getting worse. 2023 was the hottest year on record, and 2024's first rainy season already seems to be cut short. Even though COP28 brought us the UAE Consensus last year, starting to phase out fossil fuels now will do next to nothing in the short term. Environmental risks make up half of the top 10 risks over the next decade. And this year, the year of the Dragon, is associated with upheavals in nature; businesses had better ensure that their continuity plans are updated to factor in natural disasters.

Is anything going to go well at all in 2024?

According to popular interpretations of the zodiac, there is some small ameliorating factor. 2024 is the year of the Wood Dragon, said to have a more cooperative, logical nature that can go some way to reducing downsides and softening potential crashes. How might this play out?

For a start, collaborative rather than competitive ventures may be a good bet this year. In a high-risk, low-potential environment, competing businesses will do better to moderate their ambitions and take a smaller cut of the profit in exchange for jointly mitigated risks. The ventures themselves should be backed by solid data, sound governance, and objective decision making; even if the year of the Dragon is supposedly a time for big bets, 2024's global environment means that big misses will be even more disastrous than usual, without much outlet for recovery.

If big plans are to be made – or have already been made – rather than launching them with a bang, businesses might do well to follow a more measured, flexible rollout that can be quickly adapted to changes in the market over the short term and then extended over the long term if need be. In fact, after the chaos of the pandemic, the war in Europe, and the crypto collapse all in consecutive time periods, caution ought to be the name of the game for businesses around the world.

Importantly, leaders, planners, and strategists should not overestimate themselves or underestimate the environment. Each of the upheavals mentioned above had been predicted for some time before actually happening, and their impact on the world was so severe because it was underestimated. This is not to advise excessive caution – some risk must be borne in order to achieve anything – but regardless of what the zodiac year calls for, too much ambition is not advisable at this point in time.

It's a middle ground that may seem timid for a year named after a powerful mythological creature. But we should remember that even in myths, dragons can come to spectacularly bad ends, or more frequently become the cause of spectacularly bad ends for others. We might not be able to ride the upswing that the year of the Dragon supposedly heralds, but at least we can avoid the crash that's the other side of that optimism.