Even as we have rounded the corner of the New Year, we recognise that many in the country are still adjusting, and almost all business sectors are struggling in the wake of changes brought about by covid19. We know that that while some businesses were able to successfully pivot, others have had to scale down.
New hope springs however, with the approval of vaccines and the government’s commitment to shortly begin implementing a vaccination programme. Once underway, this should signal a return to some measure of pre-crisis normalcy, and with it, a more positive economic climate moving further into 2021.
A recent article from McKinsey and Company by Sneader and Singhal titled The New Normal arrives: Trends that will define 2021 – and beyond notes that, "2021 will be the year of transition. Barring any unexpected catastrophes, individuals, businesses, and society can start to look forward to shaping their futures rather than just grinding through the present." The article focuses on what businesses should expect in the coming months and even beyond as we settle into a post-covid world. Tellingly, it notes that the crisis is expected to spark a new wave of innovation and launch a generation of entrepreneurs. In just the third quarter of 2020, the USA had some 1.5 million applications for new businesses; almost double that for the same period in 2019. Although many of these are one-person operations, high-propensity businesses (those that are likely to grow to have a payroll) increased by over 50 per cent. Also showing increases over 2019 figures was France, where there were 84,000 new business formations in October 2020, while Germany and Japan also had increases. In the UK, new business registrations rose by 30 per cent, the highest since 2012. While figures may not be readily accessible locally, it is clear that Trinidad and Tobago is also seeing an increase in entrepreneurial activity as a host of new, innovative products (food and beverage, cosmetics, apps and other digital technologies) which have become available in our market space.
The digital sector is one that has seen tremendous growth, and the article notes that, "Digitally enabled productivity gains have accelerated the Fourth Industrial Revolution." The pandemic may actually be a productivity driver. Forced to switch to online modes of working, it may be surprising that there have been increases in productivity. In the third quarter of 2020, productivity in the USA saw the largest six-month increase since 1965. Nominations for the Chamber’s 2020 Champions of Business Awards served to highlight the leveraging of digital technology by every business in all categories; technology was instrumental in the pivot and survival measures adopted. Going forward, the new ways of working and engaging are unlikely to change and will continue to grow and develop.
The McKinsey study also examined how businesses are responding to the changes brought about by the pandemic. It highlighted a number of areas that will be significantly impacted, for example biopharma and retail. The process leading to the development and roll out of a number of covid19 vaccinations has taken place with unprecedented speed. The “bio revolution” will be one of the frontiers of the innovation, the place where biology meets technology. For both consumers and merchants, shopping behaviour is permanently changed. Although different markets have reacted with varying degrees of enthusiasm to the shift to online retailing, it is expected to continue and indeed to grow. One major local retailer, Excellent Stores has already closed its largest branch and largely brought its services online.
The future is here. The change has been sudden, and many do not go bravely into the future, but rather stumble to find firmer footing. Perhaps the time has come to stop referring to the “new” normal and simply embrace the now.