Considering that at the end of the first quarter of 2020, most countries in the world found themselves in an unexpected and unplanned situation, which left a deep mark on global economic trends and, indirectly, on social activities, there is growing concern for the future that is knocking on the door and asking questions “how and in what way to continue with business activities
A large number of industries have experienced losses and tectonic changes, so it will take years to return to 2019 levels. There is a big question mark that stands “above the heads” of a large number of industries and their ability to generate added value.
In addition to economic losses, most employers and employees also experienced personal losses, both through reduced activity, declining income and profitability, but also through job losses.
States have also faced increased pressure on social transfers and intervention measures aimed at the economy due to lockdown.
All of the above things became unavoidable everyday topics.
The message that needs to be drawn is therefore a complete revision of:
- Workplace and place of the job performance
- Industries that have the opportunity for further development
- Consumer habits
Although some industries still have activity at an enviable level, there is a real fear that it will not be possible to keep such activity at the same level (construction, trade, certain service activities, etc.). Therefore, some industries are expected to return to the old levels, while some of them will face a decline in business or disappearance from the market. The reason is the return of people to old habits (travel, socialization, attending events, etc.), while people with excess capital at some point, due to reduced activity or implemented projects, will stop investing and keep excess wealth in that form. This is due to a possible decrease in demand for long-term investments because personal income will decrease globally, and part of the rich population will keep or increase their wealth.
What is perhaps most important to observe is how states will be set up as the institutional framework – whether they will be the driving force or a set back to recovery.
But, due to the challenges that we have faced, “weak links” and other “non-functionalities and illogicalities” within state systems are becoming more obvious. Also, it is very easy to detect deviations because a part of the population that is most affected by the pandemic will look for answers and reasons why some parts of the system are severely affected, and why some parts are like “isolated islands”, and do not feel the effects of the global pandemic and lockdown. Special attention will be paid to the social management of wealth and resources. We hope that, both in the real and in the public sector, people will think more about their own expediency, efficiency of individual business segments and general interest.
Just as important are the steps that need to be taken in the economy:
Revision of the workplace and place of the job performance
One thing is for sure, and that is that job descriptions and assignments will be revised in line with the current situation. Some of the employees will no longer be able to perform activities or operations that they could before, the required number of executors of certain activities will be reduced, digitalization and automation will increasingly lead to a reduction in the need for human labor. Some activities, due to such changes, may be threatened with disappearance from the market.
Also, the place of work through the pandemic, for the prevention of infection, was allocated to the employees homes or to the prescribed locations. With the given facts, the companies are being more aware there is no need for such large work spaces, facilities, secondary costs, etc.
The consequence of the jobs revision is very likely to be manifested in a general decrease in demand for workers (except for those closely specialized in the IT sector, medicine, pharmacy, etc.).
Revision of industries that have the opportunity for further development
It is inevitable that most service activities that include large gatherings (events, mass tourism, commercial carriers, catering …) will be under the maximum impact of the pandemic, but strong consequences will be felt (and already are) by the cosmetics, beauty and oil industries, retail, etc. Industries like these must be very creative and quick in adapting and selecting business models (focus on online business, price revision, etc.) in order to survive.
In contrast, some industries have maintained the current level of activity since the demand for their services / products has not decreased (food, beverages, hygiene and medical supplies, some public services ..), and those “happiest” are recording rapid development and business successes (IT, pharmacy, medicine, chemical industry).
A review of personal knowledge and competencies will be necessary because unforeseen situations require us to activate all our capacities in order to stay in the race and maintain a competitive advantage. In this new situation, acquiring new knowledge and skills is more important than ever.
Also, it is necessary to seek new market needs. Those who are fastest and most creative will know how to use them.
If you are one of those who have excess free time due to the measures that regulate social activities, use it wisely and to your advantage. Our recommendation is education (of any kind)!
Revision of consumer habits
Whether positive or negative, everyone felt the consequences of the pandemic. No matter what the consequences are, most people should analyze and revise their own revenues and expenditures and prioritize them. This situation has shown people that the some of the things we like to afford are not really a necessity, but a luxury. Accordingly, our customers and consumers will, by doing the same, change their buying habits, which will ultimately affect the business of other industries.
In addition to changing shopping habits, it is expected that changes will occur in other areas as well. No one knows what travel or business meetings will look like, or how people will conceive the property in the future.
When it comes to investment trends, the younger generations mainly focused their investments on experiences and emotions, while the older generations focused their investments more on the purchase of real estate (houses, cottages, flats …) and other types of property. Given the previous experiences of young people with loans and mortgages, it is possible that such investment trends will deepen.
We can try to predict and guess what the future will look like, but everything we can do is wait and see how time takes away the old, and brings new rules, habits, behaviours and trends which we should keep up with.
Author: Hrvoje Ljubičić