Emerging business trends in a post-pandemic world
Less prosperity, widening inequality, bloated government bureaucracies or a burst of innovation and productivity, more resilient industries, smarter government. Maybe a mixture of these...
It is impossible to know what will happen. Yet, it is possible to consider the lessons of the past and on that basis, to think constructively about the future.
Here are a few elements for business leaders to consider as they plan for the next normal, by McKinsey.
From Global to Local
The restrictions imposed in order to contain coronavirus showed us how fragile global supply chains can be. Even if there is a vaccine available to all, the prospect of border restrictions due to any worldwide phenomena (whether it is a virus or something else) will most probably continue to be an integral part of business planning and operation.
A greater preference for local over global products and services is one very likely trend in the near future.
Resilience becomes as important as cost and efficiency
In a post-coronavirus world, companies most probably want to build backup and safety plans, in terms of supply chains, succession planning (thinking beyond the C-suite), and virtually all aspects of operation.
Investors are also likely to devise ways to incorporate resilience to outside shocks, such as pandemics more systematically into their valuations.
Eventually, many companies will rebalance their priorities, so that resilience—in all its manifestations—becomes just as important to their strategic thinking as cost and efficiency.
The rise of the contact-free economy
Digitization has already been present in our lives for a while, however, the coronavirus became a significant catalyst for the shift from traditional to digital. In Italy alone, e-commerce transactions have risen 81 percent since the end of February (reflecting the state of mid-April), several countries have changed regulations to ease access to telemedicine, etc. Of course human contact will be an integral part of the “illusion of getting back to normal” for many, but the trends are unmistakable—and probably irreversible.
More government intervention in the economy
As governments step up to save the private sector, whatever means they use, many businesses are likely to be operating to some extent with public money. As a consequence, the scrutiny will be intense.
A push to redefine the global public health ecosystem to better navigate possible future pandemics and related threats could provide additional impetus for cross-country public-sector intervention.
In the same way that reform of financial institutions gained momentum in 2009, the same could be true for public health in the near future.
At some point, governments may decide to get out of the business of business. How much, how fast, and in what ways governments reduce their economic role will be one of the most important questions of the next decade.
Social and Environmental Responsibility in Corporate Values
Even before the coronavirus, there was a growing sense that shareholder value should not be the only corporate value.
The idea of the “triple bottom line”—profit, people, and planet—has started to become mainstream, as have socially responsible investment funds.
And as the coronavirus reveals or heightens awareness of social fractures, businesses will be indeed expected to be part of finding long-term solutions.
Changing consumer behavior
There could be lasting changes to consumer attitudes toward physical distance, health, and even privacy, since some consumers and governments—but by no means all—may change their attitudes toward the sharing and use of personal data if it can be demonstrated that the use of such data during the crisis helped safeguard lives.
For millennials and members of Generation Z—those born between 1980 and 2012—this crisis represents the biggest disruption they have faced. Their attitudes may be changed profoundly and in ways that are hard to predict. Concern over the possibility of other “black swan” events could change how consumers approach financial security—saving more and spending less. This embrace of thrift will appear across more and more sectors, accompanied by a stronger embrace of craft, do-it-yourself and self-sufficiency, explained by Devon Powers, Ph.D., an associate professor at Temple University’s Lew Klein College of Media & Communication in an article published on the website of U.S. Chamber of Commerce.
In the same article, Piers Fawkes, founder of retail innovation and research firm PSFK, says he foresees a new embrace of community at the local level, enabled by new digital tools, such as communal bulk buying online, which has become an everyday practice for many in China.
In the list of post-coronavirus trends, TrendWatching, a leading consumer trend firm even includes services helping to improve people’s mental wellbeing.
The bottom line is we cannot know for sure what comes next but whatever comes is a matter of choice—of countless decisions to be made by individuals, companies, governments, and institutions.