We are in a healthcare crisis that is also an economic crisis combined with an energy crisis. Add to that a looming humanitarian crisis in some emerging economies and you have a multitude of challenges, all of which are exacerbating geopolitical risks. How will this crisis change the global business landscape in 2020 – and what does it mean for the actions we take today at Softsys Hosting and other business ventures?
Fear And Optimism
The length and depth of the current economic crisis will depend on solving the healthcare crisis with an exit strategy involving a combination of an effective, widely available vaccine and therapeutic drugs. Meanwhile, governments around the world are trying to manage the delicate balance between controlling transmission and returning some people to economic activity. The stakes are high, not only in the obvious health and economic consequences of mis-steps but also in managing public perceptions of risk.
The fears we feel are real. They are reinforced by government messages, the data we read daily on infection rates and the sad reality of the actual numbers of COVID-19 deaths, in particular the data on “excess deaths” that are only now being made public. These have driven public behaviours that have controlled transmission and reduced deaths in many countries, but we now need to cautiously find ways, especially in the business community, of responsibly allowing society to adapt and manage the false dichotomy of public health and economic wellbeing.
This crisis also highlights the interdependencies of the global risks triggered by the COVID-19 pandemic. Make no mistake, we are experiencing a historic event that will change many aspects of the world we live in, such as geopolitics, the economic impact on many industry sectors, the competitive business landscape, the long-term societal impacts such as an exacerbation of inequality, consumer behaviours, the nature of work and the role of technology both at work and at home.
In addition to the dangers to public health, the pandemic and the resulting lockdowns and shutdowns could have long-lasting effects on people and societies. High structural unemployment is likely to affect consumer confidence and the speed of economic recovery, as well as exacerbate inequality, mental health problems and lack of societal cohesion.
Companies and governments are trying to manage the on going crisis, it is also challenging the relationship between technology and governance. Mistrust or misuse of technology could have long-lasting effects on society. Borders have returned, as have local communities, but technology is allowing a return to a more global world. Technology is enabling the contact-free economy, through applications such as telemedicine, online retail, and social distancing delivery methods such as click and collect. New business and employment opportunities are being created in these sectors, but a greater dependence on technology has also increased cybersecurity risks.
Business And Policy Considerations
In a time of great uncertainty, decisions are being taken today by governments and businesses that will determine how these risks or opportunities emerge and play out. In particular these include:
· To what extent do we manage the operational trade-offs between a quick return to work, but still protect our employees, clients and society more broadly?
· At a time of change for our business, with changing industry structures and changing competitive positions, how do we not only survive, but also find the silver linings?
· How can we accelerate our commitments to sustainability and drive a low-carbon transition?
· How will consumer behaviour change in our sector – and how will that affect our propositions and the way we deliver them? · Build scenarios into existing risk models to understand the impacts of different recovery rates on business, operational, market risks.