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- Even the worst-hit industries are dormant, not dead.
- SA has many disadvantages, but some factors count in our favour, too.
- There is an opportunity for local manufacturers to fill the void left by global disruptions to the supply chain.
When you imagine our world and economy in a post-corona future, how does it look?
Do you expect a return to the way things were in 2019, or do you see a changed business and social landscape, where things will never be the same again?
Where you stand on this question might be a predictor of how well you will adapt and rebuild in the months and years ahead. Because make no mistake: the coronavirus will be with us for some time – and its effects on our lives and livelihoods will reshape the economy in fundamental ways. They already are, with an ever-growing list of winners and losers.
But it’s not all bad. The convergent health and economic crises may yet give rise to a wave of innovation and entrepreneurialism. Past recessions and pandemics have created fertile ground for business model changes and entirely new categories of businesses.
Can South African businesses and professionals adapt to take advantage of emerging trends disrupting our post-Covid-19 world?
Here's what they may need to take into account.
Globalisation of services
Service industries and roles that are able to deliver digitally and remotely could be some of the biggest winners from this crisis. Think consultants, designers and web developers, teachers, IT and software professionals, accountants and project managers.
There are a number of factors counting in South Africa’s favour here – a weak currency that makes us good value for money and a time zone that puts us in line with Europe, and somewhere between the US and Asia. English is our universal business language and we have talent in key skills areas.
As companies get more comfortable with the idea of letting employees work from home, how much of a leap will it be to employ or outsource to people in other countries? Whether you’re working in the same city or on a different continent will no longer matter; quality of work and price will.
As opportunities shrink at home, South Africa’s service industries should start thinking more broadly about how to capture some of the global marketplace. This could be a big driver of our local economy in the years ahead.
Improving supply chain resilience
South Africa’s manufacturing sector has underperformed for years, unable to compete with low-cost hubs in Asia, but the disruption caused by Covid-19 has exposed the dangers of relying too heavily on a limited supply chain.
This creates an opportunity not only for local manufacturers to fill the void left by global shortages, but also to position South Africa as an attractive alternative for businesses and countries looking to diversify their supply chains.
With the right investment and government backing, shifting focus to build up South Africa’s manufacturing sector could boost our ailing economy, while also making us more resilient against future trade shocks. Finance Minister Tito Mboweni has called on South African businesses to step up local manufacturing to reduce reliance on Chinese imports, while Trade and Industry Minister Ebrahim Patel urged the country to buy local to support the economy.
Manufacturers have already started to produce vital personal protective equipment, hand sanitiser and even specialised equipment like ventilators during the crisis. The challenge now is to think longer-term about the kinds of products that are viable from both a market and cost point of view.
New forms of leisure and entertainment
Some of the worst-hit industries include travel and tourism, bars and restaurants, sports, leisure and entertainment. They are dormant, but not dead. People will still want these things in a post-Covid-19 world.
An article from the World Economic Forum puts it well: "We will always want to travel, to eat out, to be entertained, and to have experiences in person. Just don’t expect any of these activities to be unchanged. Or to be delivered by the same brands, and by the same means to which we’ve become accustomed."
We’ve already seen how a number of restaurants have pivoted to delivery or supplying produce. Live events like comedy shows and business expos are moving online. Web-savvy yoga and fitness instructors are selling paid-for video content. In the UK, pubs have been selling takeaway pints of beer and the Premier League is restarting football matches this month, albeit in closed stadiums without fans.
There will be a long list of casualties from these industries, but the consumer appetite to be entertained will not diminish. That means opportunity knocks for those who can reinvent themselves to deliver entertainment remotely or in ways that make guarantees around social distancing and personal hygiene.
We are living through a time when everything we believe to be true about society has been challenged; the way organisations, businesses and private sectors have functioned and thrived in the past may not be a guarantee of future success.
To be among the survivors, businesses and professionals need to anticipate the long-term impacts and start experimenting with new models and new products and services.
Abu Addae is CEO of fintech company LifeCheq. Views expressed are his own.
