3 actions for business to prepare for a post-pandemic future

(Credit: Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Andy Baldwin, Global Managing Partner, Client Service, EY

  • Government-sponsored economic activity is likely to remain.
  • COVID has not lessened the urgency to act on climate change.
  • Businesses are now shifting focus to drive growth.

The ambitious vaccine rollout programmes that are underway in many parts of the world are finally bringing hope that we may be turning the tide against COVID-19 and we can begin to open society and economies more broadly. These past 12 months have been an incredibly difficult period, for both individuals and businesses.

Nevertheless, it does seem sentiment is beginning to turn. Society and commerce have changed enormously since the outbreak of COVID-19 and few expect an automatic reset to pre-COVID times. Businesses now need to respond to trends that have either emerged from, or been accelerated by, the pandemic. Here are three key considerations:

1. The enlarged role of the state

Over the past year or so, the role of the state has dramatically expanded in many economies around the world. Governments have helped to manage and oversee vaccination programmes, created generous fiscal packages to support their economies and re-designated specific industries as “strategic”.

Government-sponsored economic activity is likely to remain in a number of places in the short to medium-term. For example, we expect to see significant growth in government and healthcare-related industries as buyers of services, especially technology services, globally.

Vaccine programmes have highlighted the power of public-private partnerships and multilateralism, and we can expect to see similar ecosystems coming together in the future to provide new services and address other societal challenges. Businesses should be thinking now about how they may be able to capitalize on these opportunities. They should also be more conscious about where their supply chains are, especially if they provide what are now deemed to be “essential” or “strategic” services by governments. A drive to more local or regional sourcing seems inevitable.

In certain industries, governments will also end up as significant “economic” actors through the investments they made to support certain businesses during the pandemic. Businesses may find that governments are now shareholders of some of their biggest local or international competitors. This will impact a myriad of strategic decisions, from investments, divestments, restructuring and consumer pricing. And this in turn may have implications for individual businesses on the broader economic and political landscape.

The macroeconomic implications of Biden’s $1.9 trillion fiscal package
The macroeconomic implications of Biden’s $1.9 trillion fiscal package.

2. The green agenda takes centre stage

COVID-19 has not lessened the increased international sense of urgency around climate change. If anything, it has highlighted the importance of anticipating and mitigating major threats to human well-being. The COP26 UN Climate Change Conference, which takes place in Glasgow later this year, is the focus of much political attention and may result in world leaders making ambitious commitments to reduce emissions at a faster rate.

Against this backdrop, many economies are likely to prioritize further decarbonization – driving demand for specialized technologies. Businesses will come under even greater regulatory and reputational pressure than they are today to operate more sustainably. They will also be expected to report on their environmental targets and progress. This will require the use of common metrics. This is where collaboration is most powerful. Take the World Economic Forum’s Stakeholder Capitalism Metrics, which saw a group of about 120 of the world’s largest organizations, including EY and its Big Four counterparts, come together to develop common metrics and consistent reporting in service of this goal.

The push for decarbonization will create long-term funding and transition challenges for many industries – particularly carbon-intensive ones; but it will also create opportunities. Greater transparency around sustainability initiatives should help companies attract investment, given investors’ increasingly strong appetites for sustainable assets. Regulatory intervention and guidance around ESG in the financial services industry will accelerate the drive towards greater transparency as the public and private capital markets increasingly demand progress.

3. Winning in the turn

Commentators are expecting a significant economic bounce-back in many of the major economies, driven by government fiscal stimulus, pent up consumer spending fuelled by unprecedented levels of consumer saving and business investment. The US fiscal stimulus of $1.9 trillion on its own is estimated to add 1% to world GDP output.

Many businesses responded to the crisis by controlling costs and reviewing business portfolios to preserve cashflow. We’re now seeing business focus shifting to assess how they can “win in the turn”. Research from Gartner shows that the top 8% of the world’s largest publicly-listed companies dramatically outperformed their peer group in the years following the financial crisis. Winning in the turn is all about making the right bold investment to drive expansion and growth.

The recent EY Global Capital Confidence Barometer of C-suite executives found that nearly half of respondents are planning acquisitions in the next 12 months. Notably, the majority of would-be dealmakers (65%) are looking for assets internationally rather than domestically, with innovative start-ups and tech-enabled competitors particularly highly sought after.

This anticipated buying surge will result in fierce competition for talent and assets, driving up prices and increasing the risk that companies overpay for acquisitions. That said, an M&A boom could be an opportunity for businesses to divest non-core assets and free up valuable capital that can be put toward strategic investments, including digital capabilities and green solutions.

Reframing the future

This period has been characterized by some jarring realities; the impact of the pandemic has not been symmetrical across society nor businesses. For industries like retail, travel, hospitality and live entertainment, the pandemic has been an existential threat to their survival. While other industries, such as healthcare, life sciences or technology, have seen their growth turbo-charged during the pandemic. energy, mining, metals, blockchain

What is the World Economic Forum doing to help companies reduce carbon emissions?

Corporate leaders from the mining, metals and manufacturing industries are changing their approach to integrating climate considerations into complex supply chains.

The Forum’s Mining and Metals Blockchain Initiative, created to accelerate an industry solution for supply chain visibility and environmental, social and corporate governance (ESG) requirements, has released a unique proof of concept to trace emissions across the value chain using distributed ledger technology. Building Resilient Global Value Chains | Sustainable Deve…

Developed in collaboration with industry experts, it not only tests the technological feasibility of the solution, but also explores the complexities of the supply chain dynamics and sets requirements for future data utilization.

In doing so, the proof of concept responds to demands from stakeholders to create “mine-to-market” visibility and accountability.

The World Economic Forum’s Mining and Metals community is a high-level group of peers dedicated to ensuring the long-term sustainability of their industry and society. Read more about their work, and how to join, via our Impact Story.

The dramatic expansion of digital service delivery and the acceleration of digital payments in this period will open up the potential for new and exciting business models. Paradoxically, the pandemic has given a huge boost to government attempts to clamp down on the untaxed part of the economy – with the near collapse of cash payments and the shift to e-government services, including improved tax collection. Additionally, 12 months of enforced remote working is challenging many service-based businesses to think very differently about skills, working practices and the deployment of people – opening up new and more diverse talent pools.

The opportunity right now for businesses is to begin reframing for the future. They should be thinking about how they can capitalize on that bounce-back and avoid being left behind by competitors or being unprepared for new regulatory developments, particularly in relation to green policies. By taking action now, they can set themselves up for success in the post-pandemic world.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Climate action ‘both a priority and a driver of the decade’: Guterres

Finland is a world leader in clean energy. Here’s what’s driving its success

Trump’s Russophiles under investigation, Europe remains ‘en garde’

Syria war: executions condemned as violence continues ‘on both sides’ of border with Turkey

Now is the time to seize ‘unprecedented opportunity’ of the Sustainable Development Forum, says ECOSOC President

Afghanistan extends ceasefire with Taliban; UN urges both sides to work towards lasting peace

EU and China in search of a win-win agreement through strategic cooperation ahead of the EU-China summit

‘Wind blowing in the direction of peace’ in Africa: UN Secretary-General

Harnessing the power of nature in the fight against climate change

Rule of law in Hungary: Parliament should ask Council to act, say committee MEPs

COP25: ‘Signals of hope’ multiplying in face of global climate crisis, insists UN chief Guterres

Council Presidency: Floundering with the EU 2014 budget

EU Banks still get subsidies from impoverished citizens

Century challenge: inclusion of immigrants in the health system

State aid: Commission approves €53 million public support scheme for charging stations for low emission vehicles in Romania

Is China about to launch its own cryptocurrency?

European Health Union: Commission publishes open public consultation on the European Health Data Space

Trade preferences boost developing countries’ exports to the European Union

These are New York Public Library’s 10 most borrowed books

Bank resolutions to remain a politically influenced affair

China in my eyes

5 charts that show renewable energy’s latest milestone

Making the move to more sustainable mobility – three steps for companies

This young activist explains how to change the world in 3 steps

Hungary’s emergency measures: MEPs ask EU to impose sanctions and stop payments

Telemedicine: union when the rule is isolation

International partners pledge $1.2 billion to help cyclone-hit Mozambique recover, ‘build back better’

Vulnerable young people must not be blamed & stigmatised for violent radicalisation

Scotland wants to create an ethical stock exchange (Post Brexit)

Addressing the Challenges of COVID-19 Vaccination

The future of the plastics industry is green

A clean energy future with hydrogen could be closer than we think

Human rights breaches in Guinea Conakry and Madagascar

Art, mental health and suicide: different strategies for increasing access to health services

As human genome editing moves from the lab to the clinic, the ethical debate is no longer hypothetical

How debt for climate swaps could spur a green recovery

The UN’s unyielding effort to tackle sexual abuse and exploitation: our quarterly update

Security Union: Significant progress and tangible results over past years but efforts must continue

Impact investing in Latin America and addressing the ‘missing middle’

Governments must take further action to boost job opportunities at an older age

EUREKA @ European Business Summit 2014: Innovation across borders – mobilising national R&D funds for transnational innovation in Europe

The world’s impact in a small Brazilian town and the increased demand for mental health

Long-term EU budget: The Union’s ambitions must be matched with sufficient reliable funding

Time to pay up: UN summit to push for development finance breakthrough

‘Great cause of concern’ UN chief tells Security Council, surveying ‘bleak’ state of civilian protection

How Islamic finance can build resilience to climate change

Further reforms in France can drive growth, improve public finances and boost social cohesion

The best companies to work for in 2020, according to Glassdoor

Countries must up their game to reduce low birth weights, warns UN-backed report

Libya: EU efforts should focus on protecting migrants, MEPs say

MWC2021 Launches New Initiative to Widen Access for Spanish Industry Professionals

One in three children do not get the nutrition they need

Largest joint UN humanitarian convoy of the war, reaches remote Syrian settlement

Is the EU denying its social character favouring a banking conglomerate?

Why the UN is investigating poverty in the United Kingdom

Sustainable fishing staying afloat in developed world, sinking in poorer regions

A comprehensive strategy for Eurozone’s long term growth gains momentum

Silk Road Unlimited

This is how Europe is helping companies and workers as the coronavirus crisis deepens

UN chief announces progress on committee to shape Syria’s political future

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s