2021 Prediction: How Will COVID-19 Change Business?
The DRI International Future Vision Committee has released its 6th Annual Predictions Report, looking ahead to 2021 and its impact on the resilience community. Click here to download the complete report free from the DRI Library, and read on for a prediction on how Covid-19 will change business.
Prediction: Permanent changes to business models will result from the response to Covid-19
In addition to the likely increase in home working, positive changes that have been discovered as part of the pandemic response will be incorporated into normal business activities. New business models for the post-pandemic era will emerge with flexible organizations and imaginative people transforming customer management and production/delivery operations. Inflexible organizations will be weakened or disappear, with considerable number of permanent job losses. Small businesses will suffer initially as the larger firms they support cut back or relocate. However, the management of small firms tends to be innovative and capable of seeing and taking new opportunities, so many will regroup and adjust to the new normality.
Medium-sized businesses might be most impacted in the long-term as multi-nationals have the resources to survive and small firms have the flexibility to adjust. The risk of supply chain interruptions and the need to introduce more resilience has been recognized, and many firms have changed their dependency on one supplier or one region. A portion of business will be transferred to local suppliers, but globalization will remain largely unchanged after a short readjustment. If globalization is slowed up, this will be due more to geopolitical realignments than the pandemic.
Some companies have reduced their range of products during the pandemic crisis and found they can maintain the majority of their sales volume with significantly lower costs. This will continue for a period as an attempt to restore financial viability, but customer demand will force ranges to widen again.
The pandemic has been a large-scale experiment in remote working, which may weaken the personal relationship that people build with their colleagues. It also reinforces information bubbles as people are more limited in their social interactions, receive less feedback and alternative perspectives, and do not learn from situational observation. Many people will struggle with this and will seek more traditional office-based employment.
Join us for the free online Resilience Excellence Summit Mar. 1-3 to continue the conversation. DRI Future Vision Committee Chair Lyndon Bird will be on hand with a panel on Mar. 2 discussing the findings of these reports and the shape of the coming year.