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The New Now - What Comes Next

Posted by Gary Feldman on May 5, 2020 11:49:00 AM
Gary Feldman
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As we emerge from shelter in place orders, what will the "New Now" be and "What Will Come Next?"  Although Nostradamus is not employed by I-BN, we are blessed with a variety of sources of information about markets, corporate research and economic sentiment.   Here are some common themses from our sources:

  1. The economic impact is severe, but has not impacted industries evenly.
  2. As much as we focus on business transformation, businesses are focused on survival.
  3. The recovery is coming, but will be slower for some industries than others.
Travel and transportation, sports and entertainment, oil and gas and professional services companies are the most obvious casualties of the COVID-19 pandemic.  There are many other industries which have shut down completely or are open in limited capacities such as retail and restaurants who are working solely online or via delivery.  Many manufacturers and distributors are also shut or working in limited capacities based upon their locations and whether their products are considered "essential."  Even medical suppliers, grocery stores, farms and food suppliers are also impacted due to supply chain disruptions.

Much of the research we have seen breaks the recovery into short (Q2-Q3 2020), medium (Q3-Q4 2020) and longer term (2021 and beyond) time horizons.

  • In the short term many industries will have limited ability to recover.  Other than travel and transportation which will continue to suffer from limits and fears, industries like industrial machinery and components, automotive, aerospace and other capital products will likely rebound slowly.  This will also impact companies which supply those industries.  In general companies are likely to work down inventory rather than restock in an environment of uncertainty.
  • In the mid-term, as the economy recovers, governments begin to fully staff, and individuals go back to work, the infrastructure type industries like insurance, banking and public sector will likely see a return to normal operations.  Other industries like chemical, milling products, education, life sciences and retail will likely be re-opening with minimal change to their normal.  Distributors to those industries will also likely see operations return to a new normal.   Experts expect a drop in demand for professional services as companies focus on recovery rather than improvement.
  • In the longer term, most industries are expected to return to a new normal.  It is still anticipated that some industries like industrial machinery, oil and gas, travel and transportation will still have significant disruption in 2021.  For example, cruise ships will likely still carry a stigma next year.  If you supply those ships, your business will also be impacted.  

So what will the new normal be?  Expert opinions vary from nearly the same to drastically different.  History shows that economies, business theories and human behavior run in cycles.  We have seen shifts in work and distribution during the crisis and some of these changes will likely persist:

  • Many companies have proven that employees can work from remote offices and some companies may look to reduce rent expense by "hoteling" and expanding remote work
  • E-commerce has expanded as brick and mortar retail has been closed.  More people have been buying online and the shelter in-place has likely accelerated that curve.  
  • The manufacturing location of certain "essential" products and services will likely also shift.  For example, it is likely some manufacturing of medical supplies and equipment will be expanded domestically.
  • Outsourcing and offshoring may also shift.  With more remote working and supply chain disruptions, companies will look carefully at how this pandemic affected their operations.  They may choose to work with suppliers or technology companies which are more likely to serve their unique requirements should there be a local, regional or global disruption.

The last thing anyone wants is a repeat of a total economic shutdown which is why many businesses are not reopening on the first day they are allowed to.  Although this is viewed as a once in 100 year pandemic, many companies are looking for lessons learned so the impact of the next crisis is not as severe as this one.

For more information on how I-Business Network can help your business work from anywhere at any time, contact us via web form, call at 678-627-0646 or e-mail sales@i-bn.net 

Topics: Cloud Computing, small to mid-sized business

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