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As a physician by first training and Futurist advisor / keynote speaker on industry trends and strategy to over 400 of the world's largest 2000 companies, across every industry and region, with a proven track record of longer term forecasting over the last 25+ years, here are some guiding principles to life beyond Coronavirus / COVID-19. Longer term forecasts regarding Coronavirus / COVID-19 impact on business strategy: for travel, transport, retail, leisure spending, entertainment, manufacturing, logistics and supply chains, banking, payments, health care, pharma research, energy and green tech etc.  For more details look in specific sections of this website (YOUR FUTURE drop down menu above).

I predicted many times future global threats from new pandemics

I have warned for over two decades about significant threats from new mutant viruses which appear roughly once a year, usually emerging in Southern China (for reasons unclear), just one of many potential Wild Cards that could strike down successful global business.  For example, when the SARS outbreak began to threaten our world in 2003, my media warnings about the threats from new mutant viruses reached an audience of over 300 million.

One reason I am so sensitive to the threat from new mutant viruses like Coronavirus is that 32 years ago, my own medical practice, looking after people dying of cancer at home in London, was hit by a new mutant virus called HIV - 85 million deaths since then. And 31 years ago, I started in our family home an international foundation called ACET preventing HIV spread and providing practical support in many of the world's poorest nations such as Uganda, Nigera, DR Congo, India, Thailand and so on as well as in nations like the UK and Ireland. So yet another new illness, like COVID-19, is no surprise.  It was only a matter of when.

Need for Agile Leadership and Dynamic Strategy

I have also warned many hundreds of times at global corporate events over the last 20 years that:

"The world can change faster than you can hold a board meeting. The days of having only one business strategy are over.  You need plan B, C, D and E as well - because there is no time to plan when crisis hits, and in our hyper-connected world, the impacts are even greater and faster. That's why we need Agile Leadership and Dynamic Strategy."  I was not just talking about viruses - but a host of Wild Cards which can have gigantic impacts at the speed of light across nations and industries.

Book your own board strategy review and coronavirus update - contact Futurist and Physician Dr Patrick Dixon 

Coronavirus pandemic will sweep uncontrolled across most emerging markets, rapidly

Whatever happens in the EU, North America, Japan, Australia and so on, 85% of humanity lives in emerging markets, many of whom have very limited health care facilities, and which are likely to see very rapid, uncontrolled spread, at a time when developed nations are still employing all kinds of radical strategies to flatten their own peaks of cases.  

The result will be that so-called herd immunity (when 70-80% of a population has immunity from previous infection) develops much faster in poorer nations, albeit with huge death rates amongst older and more vulnerable people.

What this all means is that business will be returning to normal much sooner in the poorest nations (within 3-5 months from their first major cluster of cases), who will be impacted by many deaths, but whose "community resistance" will climb rapidly to Coronavirus.

However there are many unknowns - for example how long immunity lasts after infection before someone can be hit again by the same virus or a slight variant.

Business in developed nations will be impacted for longer than in many emerging nations

Developed nations with the most powerful anti-infection strategies will have populations which are largely without any antibodies, for many months, maybe over a year.  Maybe longer.  Depends on many factors.  That will create an ongoing vulnerability to further rapidly growing clusters of infection, some of which may also become national threats.  The only answer to this will be very large scale vaccination, when the technology arrives.

Google N1N1 and look at Wikipedia entry to understand this more - repeated clusters some time after pandemic.

For these reasons, paradoxically, business disruption is likely to be much longer, and repeated, in many of the most developed nations, compared to the poorest nations.

Global Crisis will accelerate many pre-existing business trends

Many things will change less fundamentally than you might imagine - in March 2020.  Others will change faster and further than many expect.  The key is knowing the difference.

Most mega trends described in my books, including The Future of Almost Everything, will continue to shape the world as before, but the Coronavirus pandemic will bring forward the timings of many key events.

Examples:

Airlines will consolidate more rapidly in Europe - following US picture over the last decade.  Larger airlines will be most likely to be rescued by government.  Borderline-non-viable airlines will be allowed to fold.

Physical retail will lose out even more to online shoppers, with big jump in online sales which will only partially reverse after the pandemic has ended.  Many Shopping Malls will struggle to re-open in developed nations.

Even faster growth of virtual working and virtual teams.

Shift from broadcast media to streamed media.

Many global trends will be relatively unaffected by Coronavirus Pandemic

85% of humanity will still be living in emerging markets.

Most new middle class consumers will still be found in tomorrow's emerging markets.

The irresistible human desire to explore will drive growth in leisure travel and tourism - when this is all over.

Technology costs will continue to fall towards zero.

Green tech investment for decarbonisation will continue to boom.

Auto industry will still rush to electric vehicles.

Governments will take radical action to support national economies

Expect Central Bank lending rates at almost zero interest or going negative to mitigate economic impacts of the Coronavirus pandemic.

Expect large-scale printing of money (digital equivalent is so-called "quantitative easing").

Whatever it takes to try to prevent this Coronavirus causing deflation and major recessions.

In the 2008-9 crisis, governments were worried about "moral hazard" - risks of bailing out banks and other financial institutions who may have contributed to the crisis any poor risk taking. If the bail outs were too generous, the argument went, banks etc might become even more careless in future. Hence moral hazard inhibited what governments did.

But this time around, there is no moral hazard.  There is no risk of rewarding poor behaviours in the past.

And because of huge steps taken to reduce risks in the banking sector, global banks are in a much stronger position on the whole than in the last, to withstand economic shocks.

The global economy was growing nicely before the crisis and many nations were seeing stable growth with low inflation, job creation etc, so the fundamentals are there for a strong recovery SO LONG AS governments manage to prevent massive closures of perfectly viable businesses, which would otherwise have a really great future.

Increased government debts will create pressures on spending for a further decade

The longer term impact of the Coronavirus pandemic will be additional government debt, on top of debt created when fire-fighting the last global economic crisis in 2008-9, much of which had not yet been repaid. 

What it all means is that when all the Coronavirus / COVID-19 crisis has finally resolved, governments will be shorter of funds than they expected, paying more in interest than they expected, and needing somehow to reduce government deficits each year to zero, to then start repaying debt.

All this will be painful with pressures on government spending whoever is in power, plus higher taxation or combination of both.

Impact of Coronavirus Pandemic on Manufacturing, Logistics and Supply Chains

The Coronavirus pandemic will accelerate the longer term trend in many larger industries such as the Auto industry to shorter supply chains, within regions amongst small clusters of nations. While the pandemic will cause short term disruptions to manufacturing of many kinds, and while this will cause some company failures, most larger manufacturers will weather the storm, with some government support.

Irrespective of Coronavirus, successful manufacturers will become far more efficient, and prices of most goods will fall in real terms over the next three decades. They will achieve this with greater automation, larger factories, better design, thinner and stronger materials such as carbon fibre and composites, more recycling, improved energy efficiency, shorter supply chains, lower stock levels, and by moving factories to regions where labour costs are lower or to where demand is growing fastest.

While some have worried about exporting or importing infectious coronavirus on shipped goods, research shows that the virus loses infectivity within a day or two on all smooth surfaces, and in a much shorter time on absorbent surfaces like tissue paper.  Since transported goods are almost always in transit for far longer than this, there is no reason to think that fears of infection should itself disrupt shipping or most air freight.

A lot of supply chain trends will be relatively unchanged when the pandemic is over, indeed during it.  For example, this face remains true: moving a container 150km by lorry from Birmingham to Southampton costs the same as moving the same container 10,000km by sea from Southampton to Beijing. It will continue to be cheaper to transport melons from Istanbul to Naples than to drive melons from a village up in the Italian mountains, to the same market.

This overwhelmingly huge difference in freight costs will be one of the single greatest drivers of future global trade, despite increased energy costs and the Coronavirus pandemic. It is the primary reason why global trade has grown at twice the rate of global production over the last 30 years.

Expect over $28 trillion a year of global trade by 2030, up from more than $18 trillion in 2019. Global trade will continue to grow around 25-35% faster on average than the entire global economy. For two decades, the use of shipping containers grew twice as fast as international trade, as companies seized the opportunity to be more efficient. But the container revolution is now complete, and so the growth difference will ease.

Regional trade will grow – and global trade will slow

Ten years ago, many global manufacturers were stampeding to move factories to China and other parts of Asia to save costs, while banks were shifting call centres and IT support to India. Several years ago I predicted that outsourcing would go into reverse, which has happened. Asia is becoming more expensive. Long supply chains are easily disrupted. Cultural gaps, tariff barriers and varying exchange rates can be troublesome. Local demand in Asia is growing.

So we will see more clusters of regional suppliers, delivering components to make products to be sold in the same area. And as I say, the Coronavirus pandemic will accelerate this trend.

That is why ‘south to south’ trade will grow significantly (e.g. India to Brazil, China to Malaysia, or South Africa to Tokyo). Such trade doubled from 12 to 24% of global trade from 2000 to 2011, and will increase to more than 40% by 2030. Half of all trade in Asia is already within the region.

A significant amount of offshoring is already being replaced by nearshoring or reshoring of manufacturing – ‘jobs moving back home’. Jobs are also moving around Asia. So Intel has built a new $1bn chip factory in Vietnam, just a few miles from the border with China where labour is twice as expensive. Samsung witched almost all manufacturing of electronic goods out of South Korea to many other lower-cost locations within Asia.

How to save money on logistics

It is a scandal that 30% of trucks on the road in the EU are empty, transporting just air over 150 million kilometres a year. Tens of thousands of journeys a year are wasted carrying identical end products, components or raw materials in opposite directions from different producers, factories, warehouses – literally passing each other on motorways. Expect new websites to sort out waste, and become money-spinners.

We will also see great efforts to speed up shipping. Automated cranes can already unload a giant container ship and reload it in 24 hours, re-sorting containers on the dockside as the Post Office sorts letters and parcels.

Every day counts. An average delay of a week on the shipping time can mean a loss of up to 25% of trade. It is often 20% more expensive to trade with a low-income country than a middle-income country, because of lack of infrastructure, red tape, slow customs, form-filling and maybe pressures for bribes to keep goods moving.

Paperwork and customs delays still account for over 10% of all shipping costs in many countries. We will see huge efforts by the World Trade Organisation and governments to solve this with secure electronic bills of lading and other freight records, together with wider use of electronic tags on every item.  Expect experiments with Blockchain and other secure ledgers to make this more efficient and safe. Many emerging economies will also invest in combined rail, road and port facilities. Mexico has spent over $220bn on such a super-hub in the past eight years.

Robots taking over the world – rather slowly

Despite all the talk of robots taking over most menial jobs and putting tens of millions out of work, the growth of robots in factories has been slow – up from 92,000 to a mere 387,000 a year from 2000 to 2017. A third of that increase was in 2017. Compare this to growth of smartphones, for instance, and the pace is still snail-like. Sales of such robots are likely to increase by around 10-15% a year – mostly confined to the auto industry, which owns most robots in America. Robots will become cheaper and more intelligent, but smaller models will still cost over $20,000 each in 2020.

Expect rapid growth in military robots – with tens of thousands of drones owned by the Pentagon alone, raising the prospect of swarms of small, semi-autonomous flying robots being thrown into the air above a major battle zone. “Suicide drones” will soon be available on the open market, able to fly 80 miles an hour, to detonate explosives at any target 40 miles away.

Domestic robots are already here, of course – cleaning floors, for example – but other uses will be hard for consumers to justify, apart from control devices in things like heaters or fridges as part of smart homes. The biggest personal use of robotics will be in cars – self-drive will be almost universal. The question is only by when.

Robots as personal servants or friends?

The greatest nonsense of all has been the notion that within a couple of decades, in most homes, you will find a walking, talking cyborg-type robot that smiles, tells jokes, does a range of household tasks, or helps with personal care, and becomes a close friend. The truth is that it will be many decades before such machines become cheaper, better and more acceptable to people than real human beings. 

       Yes, it is true that sales of complex life-size robots as sex machines are growing amongst affluent men, but it is also true that real, consenting human beings are “free” and more enjoyable. Robots will face a lot of competition for such roles. There are also ethical questions: if someone is in a relationship, and then has sex with a robot, are they being unfaithful?

However, we will see major advances in devices that think ‘intuitively’, able to infer meaning from things. Google has led the way in ‘Semantic Search’, for example, which goes beyond keywords to try to understand what you are really thinking about.

We are still a long way from being able to have a sophisticated conversation with a robot, on a wide range of themes, where you cannot tell if a human is replying or if it really is just a machine. Expect many more experiments, with far more realistic conversations by 2025.

Impact of Coronavirus Pandemic on Health Care spending and pharma company research

While global resources will be mobilised to health care as a military operation of national security, when the coronavirus pandemic is over, many nations will be left with additional health care equipment and resources.  

The most important single outcome for pharma companies will be gigantic research efforts to develop a wide range of effective antivirals, with similar impact on treating viral disease as penicillin and other antiobiocs have had on treating bacterial infections since the 1940s.  It is a scandal that humanity to date has invested so little in antivirals, and that we lack a single antiviral medication in March 2020 that is as effective against any virus as penicillin was when first discovered over 80 years ago.

Vaccine technology will also see major investment, in the struggle to find smart vaccines that don't work in the usual way (old style means inactivated or weakened versions of viruses administered to millions but such things can take over a year to develop and widely distribute.)

Humankind cannot afford to be held to ransom by every new mutant virus that emerges and spreads widely - and we are seeing on average one of these a year, expect even more as population grows towards 11.5 billion people by 2070.

Impact of Coronavirus Pandemic on 

Impact of Coronavirus Pandemic on Travel, Aviation and Tourism

As I have said, the human desire to explore is very powerful, and as soon as people feel reasonably safe to travel, they will do so again, in very large numbers, increasing every year in line with population and growth of emerging markets, especially the rising middle class.

Impact of Coronavirus on Food and Drink Retail, Shopping, e-Commerce

Even before the Coronavirus Pandemic, grocery and food retailing was being transformed, with rapid shifts to online deliveries, which will accelerate. However, the human hunte er-gatherers instinct will endure, and when the Coronavirus pandemic is over, we will see pent-up shoppers enjoying the freedoms and sensations of physical food shopping again.

Other than that, the mega trends impacting the sector will continue. The retail food industry will continue to be conservative and risk averse, with long-enduring and much-loved brands that span several generations – foods that grandmothers remember feeding their own children.

We have also seen how sensitive the food industry is to issues of consumer trust, which will drive the continued growth of traceability, transparency, labelling, and so on. The entire food industry will be far more tightly regulated in future. We will also see a new focus on the health aspects of foods; expect new performance foods with claims that they build strength, or immunity, or improve memory.

Nutrition will be a number one issue for many well-informed food buyers, who will increasingly recognize the benefits of nourishing healthy gut bacteria, which make many of the molecules that we need to renew our own cells and fight disease. Expect many new types of food preparations and formulations, designed to create foods with optimum nutritional value, using ultrasonics, special additives, hyper-speed blenders, liposomes and a host of other technologies.  The boundaries between pharmacology and nutritional microbiome science will blur and some pharma companies will expand into this lightly regulated area. 

Expect new frozen food technologies to be adopted rapidly, allowing even the most delicate of fruits to be perfectly frozen without damage or changes in taste and texture.  The same methods will be used to perfectly preserve vegetables and very delicate fish. The results of this technology are astonishing to food lovers, and will delight chefs of the best restaurants in the world.

Expect a rethink about food irradiation over the next few years, as a low-cost way to ensure long shelf life, and less food waste, without altering taste, following a wave of additional research that suggests it is completely safe.  It means, for example, that a loaf of bread can stay perfectly fresh in a sealed plastic bag for many months.

We will also see many more food scandals such as happened with the contamination of rice in China, and of animal feed by dioxin in Belgium. Each will cause a huge emotional reaction in consumers, with widespread, angry boycotts. Expect improvements in animal welfare across the EU and in other nations, and an increase in use of animal tagging for 100% traceability.

Impact of Coronavirus on mobile payments, use of cash and banking

Hundreds of millions of bank notes were destroyed in China during the Coronavirus pandemic because it was feared that they would be vectors for virus transmission.  The Coronavirus pandemic has shifted tens of millions of shoppers online, using the web in ways they never have before, and these habits will endure.  At the same time, many consumers have shifted to cashless payments to avoid ATM machines or physical banks, especially using no-touch payments.

Without trust you have no bank. You could say that trust is the only thing a bank really has to sell. The fundamental issue for many banks is how to rebuild trust after scandal upon scandal. This will require a revolution in culture and day-to-day behaviour.

Banks and their shareholders were punished, mocked, blamed by societies following the 2009-2009 global banking crisis. Owners of banks lost huge amounts of money. But the main owners of bank shares were of course pension funds, so all of us were affected. And some banks will come under pressure during the Coronavirus pandemic.  However, most will remain in a relatively strong position because of all the new regulations passed from 2010-2020 forcing banks to hold more capital reserves in order to withstand future shocks (like the Coronavirus pandemic)).

However, expect more global regulations to force banks to hold more capital, with lower limits on the levels of risk-taking. But if regulation is too severe and returns on investment fall too low, no one will invest in banks, banks will be poorly led, bad to work for, with old technology, vulnerable to hacking, and providing last-century levels of service.

Rise of third millennial banking post coronavirus pandemic

Investment banking risks have already been separated from retail and corporate banking. We will see further regulations. But we can also expect to see some regulations relaxed by 2025. New types of banking services will also evolve, with ingenious work-arounds, enabling better investment returns with better managed risks. 

Many predicted the decline and fall of the City of London as one of the world’s dominant financial centres. As I said at the time, this was overstated. Whatever the final terms of the trading relationships between the UK and the EU after Brexit, the City will continue to be one of the world’s most important communities of the smartest and most experienced financial experts, from over 100 nations. The City will also continue to be one of the greatest generators of GDP in the UK. 

Retail banking will become far more mobile, automated and highly competitive.  As we will see later, banks will become telcos, and telcos will become banks, along with a string of new non-banking competitors who have all applied for banking licences in Europe and elsewhere.

Revolution in peer-group lending

Expect rapid growth of peer-to-peer lending, social lending or crowd-funding websites. Costs are less because connections online are short between lender and borrower, with no people in the middle taking big fees, no banks involved.  A huge advantage is that large numbers of small lenders can club together to share their risks, in a single loan transaction.

China saw a massive boom from 2015-2018, with an astonishing $217bn of loans issued, but some investors lost huge sums and 300 companies went out of business following new regulations. 

Brazil, India, Indonesia and Israel are passing new laws to facilitate safe expansion. $4bn is lent each year on such platforms in the UK alone, with average savings of at least 1% on interest rates from banks. The loans are mainly between 18-34 year olds. Peer-to-peer lending is just a small fragment of the rapidly growing ‘shadow banking’ industry, and regulators are slowly catching up. In the past, such lending has been by individuals to individuals, but hedge funds and other financial agencies are piling in to provide lending capital.

Linked to this movement is crowd investing, which will also boom: where large numbers of small investors club together to back an entrepreneur. Crowdfunding platform Kickstarter alone has raised over $4bn a day for entrepreneurs.

Impact of Coronavirus pandemic on energy industry, green tech and speed of decarbonisation

The impact of the Coronavirus pandemic on the energy industry will be mainly one of consumption, mainly during the peak of the crisis. This will rsult in lower oil, gas and coal prices.  In turn, this will create severe economic pressures on nations like Russia and Saudi Arabia who are very dependent on carbon-fuel foreign exchange. This will have a negative knock on impact for all sales of alternative energy such as wind power, solar power, district power and heating and so on.

However, patterns of energy use and prices will return to more normal levels as soon as the pandemic levels off and declines, which could happen in many parts of the world quite rapidly.

Book your own board strategy review and coronavirus update - contact Futurist and Physician Dr Patrick Dixon 


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