Trends to know for a prosperous 2021 and beyond
2021 will initiate a period of transition into the post-COVID era. This blog covers some trends and factors that businesses can use in their preparation for the next normal.
The COVID-19 pandemic isn’t over, but with vaccines in distribution globally, there’s a ray of hope for 2021.
For most of the previous year businesses were in turmoil, trying to adapt in the face of newfound restrictions, economic challenges and evolving customer expectations. These changes in the business environment will be carried forward to 2021, and beyond, making it imperative to prepare for uncertainties better than how we did in 2019.
To put it another way: the new normal is here. The crisis and its recovery are already shaping how business will be done. There are new stakeholder behaviors, and knowing which traits are here to stay will make all the difference. In this article, I will draw on research into some factors and trends that will shape 2021 and beyond:
A. ‘Revenge Shopping’ is beginning to mark the return of consumer confidence
Discretionary spending is set to be exposed to ‘pent-up demand’ in 2021 as it happens in every economic downturn. This pent-up demand will be more common with the younger demographics, who share high optimistic behavior, and will especially emphasize services like restaurants, shopping malls and theatres. Although consumers have been mindful of their spending last year, with every four out of ten Americans believing their incomes won’t reach pre-COVID levels anytime soon, this statistic is set to improve by spring/summer when consumers will feel confident to be more mobile as vaccines get administered to larger parts of the population.
B. Leisure Travel closing normal levels, business travel not so much
People who travel for leisure will gain more confidence to do so in 2021. Domestic travel will see a boom first, as has been in China where hotels and domestic air flights had people around 90% of its 2019 levels in late August. However, the fate of international travel for leisure still remains uncertain; in Phuket, the hotels that had opened in the hope of attracting tourists are now closing again. And business travel is likely to follow suit, mainly because of video calling and collaboration tools facilitating remote working. This is a concern for airlines since business passengers account for about 75% of their revenues.
C. New generation of innovative entrepreneurs
The COVID crisis reinvigorated the need to innovate, more so to digitize everything from supply-chain reinvention to AI in healthcare. Speaking of the latter, NurseHack4Health–a Microsoft-led Hackathon–saw 9 new ideas from nurses addressing pandemic problems. The disruption also led to new innovators and entrepreneurs in various other industries. In quarter three alone, the US saw 1.5 million business formation applications, with around 550,000 of them having a high propensity of turning their ventures into businesses with payroll. This improvement in the entrepreneurship rate will significantly increase employment opportunities and economic growth, given that small businesses in the US employed around 47.5% of the private workforce before COVID.
D. Tech advancement & digitization benefits continue to favor industrial growth
COVID countermeasures led to much quicker adoption of digital technologies, and these changes are here to stay. The digitization of supply-chain redundancies and internal operations of companies globally has been accelerated by several years. Many businesses, from eateries to business consulting, adopted virtual selling to at least pay operating costs. And what were developed as temporary solutions, are now being refined for the long haul. This opportunity to welcome transformation of business processes will expedite the Fourth Industrial Revolution, generating productivity more efficiently.
E. Shift from complicated supply chains
Long and arduous supply chains resulted in phases with halted production throughout 2020. Volkswagen reported a “massive” shortage of semiconductor parts as automobile markets start to recover. Such lack of critical components could have been avoided with more sophisticated risk management. Therefore, executives are considering diversifying their supplier base by harnessing regional talent to continually serve fast-growing consumer markets. Even though companies will ensure business continuity with their tier-one suppliers, testing local expertise can come useful during dark times.
F. Remote work is the way ahead
COVID-19 necessitated a way out of the restrictions imposed on movement for work. And so, working from home became normal. The idea of remote working was already seeing potential, but the pandemic expedited it and existing technological infrastructures aided this shift. Even though the restrictions are getting eased, executives from top companies continue to hire for work-from-home jobs because they understand successful remote work strategies can help collaborate in any environment. That said, personnel from different industries have different propensities of working from home–professors are finding it much easier to adopt to remote working than solutions engineers, for instance.
The COVID-19 pandemic isn’t over, but the entire world is contributing to the war against it. We’re almost at the end of the tunnel, and so it becomes necessary to strategize the way ahead as we embrace the next normal. That said, I am confident that you will take adequate and appropriate steps to shape your future, and not just toil in the present.