The speed with which Covid-19 has spread around the world has highlighted the potential vulnerability of some industries when borders are closed and supply chains insecure. This finding will prompt governments to regain control of the economy and bring several strategic companies home, in order to regain control of strategic assets. This could be the first step in the move towards a smarter and more sustainable globalisation.
Western countries will review their trade strategy for vital goods and will be much more committed to self-sufficiency. There will be a new phase of relocation for all sectors, in which companies will diversify their production sites and will no longer see China as the (only) factory of the world. This development could bring back many low-skilled jobs to Europe, leading to lower unemployment rates, higher wages and inflation.
Less attention to profit
Companies will try to improve their resilience, sometimes at the expense of profit. For example, they will adjust their stock management. This can have financial consequences, but stability and business continuity will prevail over quarterly results. Companies will also be more responsible for the sustainability of their business model and their positive impact on social and environmental challenges. The principles of ESG (environment, society and governance) will thus gain even more importance.
Technology is the big winner. It will continue to progress in all areas of our lives: education, healthcare, retail, communications, payments, security and more. Digitalisation will certainly accelerate now that everyone has seen its huge benefits of recent months. As a result, digital applications will be developed on a large scale in all sectors and for all population groups.
More investment in healthcare
Finally, the current sanitary crisis exposes the risks of outdated, limited or inaccessible healthcare. All over the world, this could prompt countries to move towards state-managed health care. At the same time, investment in health technology will increase. Each structural crisis leads to specific improvements but also to new regulations. After the 2008 global financial crisis, we saw the boom in FinTech and a tremendous growth in investment. After Covid-19, the same will happen in the field of health. HealthTech will be the new FinTech.