2020 will go down in history as the year when the world came to a halt, at least for a while. Many firms are currently struggling for survival, and their established marketplaces may never be the same again. However, this may not always imply simply terrible news. Companies that are willing to change and learn from the last difficult months may emerge stronger, more competitive, and more resilient as a result of the crisis. About this topic, Scott Galloway speaker, bestselling author of ‘Post Corona: from crisis to opportunity’ and professor at NYU offers guidance to Fortune 500 companies in his keynote speeches. He talks about the Covid-19 crisis and how it was not an agent of change, but rather an accelerant of trends that were already underway.
Identifying key market trends
The key to success is thus to recognize and capitalize on fresh possibilities. “We are certain that many of the changes are here to stay, and that the most successful firms will be those who can modify their business models to account for changes,” says Sara Bouchon, Head of Market Intelligence at Luxinnovation, Luxembourg’s national innovation agency.
Her team just published an in-depth report titled “Post COVID-19 Market Trends.” It is part of a nationwide initiative spearheaded by the Luxembourg government to assist businesses in emerging stronger and more competitive than before the crisis. The research offers a one-of-a-kind look at the innovations, technologies, and trends that will impact the economic landscape in the coming months and years. Digitalization, sustainability, resilience, and innovative business methods are cited as four important market developments.
According to some business speakers and experts, the quick adoption of digital technology to run business as well as basic areas of everyday life during the pandemic catapulted us forward 3-4 years essentially overnight.
Industrial firms are likely to increase their investments in big data, the internet of things, cloud computing, and other technologies required for “smart factories.” “In China, enterprises with a high degree of automation and technologies allowing remote control of equipment fared significantly better than others.” The COVID-19 dilemma will undoubtedly hasten the digitalization and automation of industrial output in other regions of the world.”
Supply chains that are resilient
The COVID-19 dilemma has also emphasized the critical need to construct smarter, stronger, and more varied supply networks that are robust and capable of surviving crises. “In the future, we anticipate global corporations to diversify their supply chains considerably more and rely less on single-sourcing models driven only by cost control,” says Dr. Bouchon. “More enterprises will also attempt to decentralize their manufacturing capacity and relocate sections of their production closer to home.”
Towards a New, Long-Term Paradigm
When it comes to sustainable business and societal practices, COVID-19 has been a total eye opener. “The shutdown provided us with a simulation of how to dramatically decrease our negative environmental footprint,” Dr. Bouchon explains. “If we want the post-COVID economic recovery to persist, we need to ‘build back better,’ as the OECD recommends.”
Romain Poulles, president of Luxembourg’s Higher Council for Sustainable Development, goes even farther. “We need a total paradigm change toward an economic model based on well-being, social equality, decreased environmental hazards, and far less reliance on finite resources,” he believes. “This would very certainly result in the most significant commercial possibilities in the previous 200 years.”
The shift to clean, renewable energy sources, reusable medical equipment, nutritious and locally produced foodstuffs, and the creation of sustainable and resilient public infrastructure are among the key sustainability themes listed in the Luxinnovation study. Circular business models are also emerging, such as product-as-a-service and the sharing economy. Mr Poulles feels that “every product is a service waiting to happen.” “I believe that firms will increasingly shift their business models to offer services rather than products in order to have more control over their resources and reintegrate them into their own value chains after their first usage.”
A shift of focus in business strategy
One thing is certain: COVID-19 will have an impact on the plans of many firms. Changes in consumption habits, the introduction of new forms of entertainment and tourism, the rising relevance of remote working, and other factors, according to Luxinnovation, will lead to the development of new business models. Many businesses are now analyzing their offerings to determine if they still match what customers want and if they are focused on the most relevant target groups.
This catastrophe has permanently changed the way we collaborate,” Thierry Ravasio, Head of Corporate and Public Sector at KPMG Luxembourg, says. “There has been a shift in emphasis toward what is truly important: consumers, employees, and citizens.” According to our CEO Outlook Survey for September 2020, the crisis has expedited digital transformation and social responsibility efforts, and these attitude adjustments are expected to continue. A motivated workforce, robust and agile operations, and exceptional customer experience are other hot subjects that will continue to drive future corporate strategy.”