You & the COVID Economy: Finding Your Way Forward
The recent COVID-19 pandemic has seen the collapse of key business operations across many industries. International travel and hotel occupancy have drastically decreased, with many countries closing their borders. Restaurant and café turnover across the globe has also dropped dramatically, and a large proportion of workers are now working from home.
While the full impact of this disruption is unknown, what’s clear is that the ‘COVID Economy’ is the new backdrop for business strategies into the future.
The COVID Economy: Getting Oriented
Although there are many hoping that the economy will “snap back to normal”, the fact remains that the pre-COVID economy was already experiencing a downturn – with weak wages growth, rising inequality, increasing unemployment, low interest rates and growing debt. We were staring down the barrel of an impending economic collapse. The pandemic has merely tipped the scales.
Many businesses were already in a transition to the “Future of Work”, with some undertaking significant digital transformations, including the deployment of Artificial Intelligence (AI) and Machine Learning (ML) technologies.
At the same time, investments in the “square-metre economy”—a system in which economic activity is tied to physical infrastructure—continued, despite the immense growth in digital businesses and mobility. The COVID pandemic has served to re-frame some of those investments and accelerate others.
In all likelihood, COVID-19 is here for the long haul. Like the flu, there may not ever be a vaccine that is 100 per cent effective; it’s much more likely that we’ll develop more effective treatments for it.
But as with other times of major upheaval, there is a way forward. There always is.
The Opportunities: There for the Taking
So far, we have witnessed a rapid movement to telework. We’ve learned that almost 40 per cent of jobs can be done from home. Some organisations even note productivity improvements with these arrangements.
There has also been more use of online digital services, whether it be increased online video conferencing, retail purchases, usage of entertainment streaming services, or greater uptake of educational and training courses on online platforms.
We’ve also seen the pharmaceutical industry come under the spotlight, with greater investments towards research and innovation. However, this has not come without its challenges. The pandemic has forced the pharmaceutical industry to become more responsive and re-think their supply chains and operational strategies to keep up with increased demand.
General trends indicate a reorganization of assets and supply chains, and an urgency towards greater uptake of digital services, robotics, and automation.
The Risks: Clear & Present Danger
Understanding the risks is crucial in navigating the financial and operational challenges of the COVID Economy. The spread of the person-to-person contagion has increased operational risks in high-density spaces and cities. It has disrupted global supply chains and severely restricted international travel – with huge impacts to the tourism and travel industries.
Businesses that have relied on and invested into commercial real estate in cities face new risks posed by co-locating workers in high- density offices. The costs of complying with new safe-distancing and sanitisation regulations also loom large.
Meanwhile, collateralized Loan Obligations (CLOs), though inherently risky, have become much more precarious with COVID-19. Falls in corporate revenue increase the odds of firms being unable to meet their financial obligations.
These structural disruptions are just a few examples of developments that will require new strategic responses from organisations.
Act Now: The Quick Wins
Businesses that adapt quickly to the COVID Economy will leverage new opportunities and see immediate benefits to their organisation, communities, and people.
The quick wins are there for the taking. They just require a COVID Economy mind-set, skillset, and strategic understanding of the emergent conditions.
With a re-focus on distributed services and local production, asset management and supply chains will need more resilience and agility to adapt to geo-shocks. Distributed workforces will help reduce the risk of these shocks. These workforces should be supported through an emerging telework market – with localised services in meeting the technological, accommodation (e.g., localised work hubs), and the hospitality needs of these businesses.
We can also expect to see a shift towards increased consumption of new pan-safe (i.e., pandemic safety) products and services that support a COVID Economy lifestyle and meet business sanitisation standards.
Spread the Word
Adjusting to the COVID Economy means joining the right networks. No single individual or organisation can support this changing market alone. It will require an ecosystem of suppliers and clients, both upstream and downstream communities, to support a smooth transition to the COVID Economy.
So spread the word: the COVID Economy is here to stay!