New normal brings New Industries

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New normal brings New Industries

The phrase “new normal” has become something of a cliché but we’re all very much aware that life will not return to normal as the world emerges from the impact of COVID-19. The question we are asking ourselves is what might that mean for business and industries and where are the opportunities and growth sectors?

 

There are no absolute certainties and while I hear my economist and banker colleagues saying “there is no crystal ball” but as business owners, it your role to envision what this new normal might look like and where opportunities for your businesses exist.

 

What I challenge you to do is to use this article to stretch your thinking in terms of value chains and new industries.

 

Remote and virtual living

We’re all living it: Whatever we can do from the comfort and safety of our own homes, we do. This is expected to negatively impact the commercial real estate sector but it will also mean more demand for goods which support a Work From Home (WFH), Shop From Home and Learn From Home environments.

 

Below I include an example of goods and services which will thrive due to this change in habits:

 

  • Last mile distribution and home delivery means businesses will need new packaging material to better protect and trace items delivered to homes while logistics businesses will make use of smaller vehicles for the last mile
  • Internet and cyber security: More internet demands mean more towers, more fibre and cables, heavy equipment, data rooms and tools to test and manage connectivity
  • Remote working equipment: Personal computers, routers, home office furniture and tools are all going to be in demand
  • E-learning equipment: Tablets, laptops and internet connectivity through modems, routers and other hardware

 

Social distancing

As social distancing becomes the norm industries across the globe are changing how they do business.

Airlines are looking at how to adapt their seat spacing, manufacturers are looking to reduce the exposure for their workforce and implement robotics while Personal Protective Equipment (PPE) is worn by far more people.

 

The fear of exposure will negatively impact the public transport systems such as the Gautrain and is likely to promote greater use of personal vehicles or delivery services.

 

Essential Goods security

As countries acknowledge the lack of preparedness and safety stock levels, there will be an increasing need for medical and pharmaceutical, hygiene and chemicals as well as food products and the various industries which support them from packaging to cold and dry storage and holding facilities.

 

Infrastructure

In every country, there are infrastructure stimulus packages running into the hundreds of millions of dollars. The entire infrastructure value chain from filtration systems for water projects to Solar PV panel and cabling energy projects will require additional supply. With social distancing reducing the number of passengers on public transport, additional and commercially viable capacity will be necessary including passengers opting for other forms of transport and added train carts.

 

With the reduction in the prime lending rate, we could see a changing dynamic in the housing and home improvement markets. There will be a need for affordable housing, public and private investment into housing and home improvement including the building of home office spaces or moving into larger homes to accommodate for remote working while remote working will drive demand for homes in high internet access locations.

 

The lack of healthcare facilities has been exposed by the COVID-19 crisis and with more pandemics expected in the future, the healthcare sector must be reinforced promoting the supply of goods for the build and establishment of such facilities as well as the continued management thereof. From specialized HVAC systems, security, consumables and medical supplies, the emphasis on healthcare infrastructure will provide opportunity for industrial capacity.

 

These new sectors and demand will require strong business owners with the capability, offtaker networks and credibility to secure finance in an financial environment which is currently very cautious and risk averse.

 

There is certainly a lot of opportunity, but finding the right mix of experience, expertise and capital will be the differentiator.

By |2020-08-25T14:11:00+02:00Aug 25th, 2020|Business, Critical Infrastructure|Comments Off on New normal brings New Industries

About the Author:

Nadia is experienced in industries ranging from FMCG to manufacturing and mining. Her skills lie in business analysis, financial/business modelling and accessing developmental funding. She has a BCom Finance (UJ) and another BCom in Economics & Econometrics (UJ). She has also been accredited with the UNDP for Supplier Development.