How the coronavirus pandemic will reshape global business

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The spread of coronavirus, and the measures being taken to stop it, have already had a significant impact on how businesses operate. But as well as short term adjustments, the pandemic could lead to three lasting changes.
Reshaping global supply chains
The first thing it could do is change attitudes to risk. As Reuben Abraham, CEO and senior fellow at the IDFC Institute, pointed out at a virtual WIRED panel organised in association with Accenture, coronavirus was not an unforeseeable “black swan” event.


The countries that have handled it best – Abraham cites Vietnam, Taiwan and the south Indian state of Kerala as prime examples – have been those which had recent experience of managing a pandemic. They knew how real the risks were, and therefore took immediate and decisive action to mitigate them.
For businesses, the risks of Covid-19 have come not just from the disease itself, but from the disruption it has caused to global supply chains. The majority of businesses did not have a plan ready to launch in the event of such significant disruption – and although many had backup suppliers in place, few considered seeding them across different countries to spread the risk. That’s starting to change.
“It has been very clear that these just-in-time processes have enormous fragility built in in an event like this,” Abraham says. He points to the pharmaceutical industry, where a large number of basic medicines such as paracetamol are currently produced in China – even for countries which have significant manufacturing bases of their own, such as India.
“You do not want to concentrate all your risk into one environment is something that is definitely going to emerge out of this pandemic, which I believe will then lead to a restructuring of global supply chains,” Abraham says. That could mean a greater spread of manufacturing across countries with lower labour costs – the winners could include Bangladesh, Sri Lanka and Vietnam. Or we could see regions such as Central America or Eastern Europe benefitting from being closer to the end consumers of many products. A more distributed supply chain will spread risk, but may be more complex to track, so we’re likely to see the increase of cloud-based tracking technologies to enable companies to co-ordinate these elements.


A K-shaped revolution
For Rachel Barton, head of strategy and consulting at Accenture, the pandemic has triggered some long overdue changes to operating structures. “The resilience within the way that businesses operate was relatively low and the cost structures that supported businesses were too high,” she says. “I think out of this period, we will start to see glimpses of change that really, we could have thought more carefully about many, many years ago.”
We’ve already seen far greater adoption of digital communication and cloud computing tools, which have enabled people to work remotely or order drinks without queuing, and there could be a greater use of automation in factories or stores as companies try to cut costs or encourage physical distance. In some industries, being able to quickly pivot to a digital offering has been vital to survival during the pandemic. Paulette Rowe, CEO of Integrated and E-Commerce Solutions at Paysafe, cites fitness as a prime example.
There has been a lot of talk about the “new normal” during the pandemic, but Abraham is keen to point out that this doesn’t actually apply to that many people globally. Some experts are predicting a K-shaped economic recovery where the gap between rich and poor widens, and there’s a danger that the same could apply to the technological and business changes brought about by the pandemic. Only a small subset of society are able to do their jobs remotely – and it’s important that beneficial changes to ways of working don’t just apply to the elite, and that people are not excluded by the advance of digital technologies. There are, as Rowe points out, two million people in the UK who don’t have access to a bank account, for instance.
More thoughtful, human leadership
Although some office-based employees have made a slow return, it’s becoming increasingly clear that the world of work for many will be different for the foreseeable future. That will require a different style of leadership from bosses who may be accustomed to having their team in the same room and will have to get used to conducting meetings via Zoom or Microsoft Teams. “How do you create that new leader who has that human touch when suddenly you’re inside someone’s home having that one to one or that team meeting?” ponders Rowe. “Leaders will need to be equipped with different skills in order to engage and ensure that the culture of the organisation still works with some of these remote models that we’re looking to pursue.”


Otherwise, companies risk losing the best people. When your office never changes, perks like an easy commute or free food become much less important, which means firms will need to work a lot harder to attract talent. If remote working becomes the norm, it could actually represent an opportunity for businesses to widen their talent pool to those for whom accessibility has been an issue, either because of geography or disability. “We should look for talent in new places, because there are no constraints,” says Barton.

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