Post Covid Business Predictions - Vol 2
< Go back to Vol 1. Covid Business Predictions
#15 Provincial NZ & the Primary Industries
Provincial New Zealand will likely fare better than the bigger cities. Touting ourselves as a secure food source with traceability (origin and path to market - things we will improve on due to people contact tracing in the Covid era) and the clean green NZ image, primary industry land use will be put under scrutiny. New crops with higher value will be planted and will drive dairy farming to smaller but intensive farming. We will see the wholesale development of dairy feed pad farming as a way to utilise the waste product of other crops. Ironically, good food (like much of the kiwifruit seconds) will go into the animal food chain rather than the human one, but we will get better at secondary production by taking our primary produce and converting it into higher value products (e.g. timber to furniture, milk to chocolate, crayfish to fine cuts). This will take time, as ready capital for such factories usually comes in JV style from overseas, and we may not be so keen to take on international investment where it comes in contact with our primary industries.
#16 Nationalism creates separatism
Nationalism creates separatism on a global scale. By pulling together, we pull something else apart. The drive to make everyone more equal also has unintended consequences of marginalising others – the haves and the have nots, those with Covid and those without, those with Religion A versus those with Religion B, those with oil and those who want other forms of fuel. Nationalism (and therefore separatism), Covid and border measures, and all economies tanking to some degree creates a fertile ground for stimulus. As differences (often dressed as similarities) are explored between America and Venezuela (and add Iran in the supply chain for good measure), America and China, Israel’s annexation intents of certain locations, India’s differences between Hindu and Islam, not to mention all the other ‘hot spots’ which cycle through the seasons, and we have a perfect incubator for a huge economic stimulator-war. Post
#17 Company Collapse
By flattening the Covid curve, NZ has killed less people, but undoubtedly will kill more companies. How many people will die from the company collapse statistics is unknown and not as well-modelled as the Covid health scenarios. This is not an argument about what is right, it’s an observation and a prediction of how things will look in the future. We are accepting that there will be some fallout economically, but we often don’t think about how the changes will impact us. Realise that the fun you had baking and growing vegetables when Level 4 lockdown was upon us, just may have occurred as a redevelopment of skills which will be needed in the future. Sewing machines will become a new hot item (all the second-hand ones first), vehicle oil changes and car servicing will become a home based activity for many, and DIY will mean more than just building activity as YouTube ‘how to’ videos grow in popularity and educate the nation on how to do things that save money.
#18 Free Trade
Nationalism has been an international trend well before Covid hit. It is continuing, but guised as a good thing. Add polarity to this, and we will see more extremist views, dogma and legislation, which will utilise the protection of the state as an easy way to slide reform-cum-dictatorship into play as a way of protecting a country’s own. Free trade will make way for protectionism, supply chains will be doubled up to build in contingencies should one trade route be halted, ‘just in time’ will make way for security of supply and the need to warehouse once again. Butter mountains may well return.
#19 Airlines
A national airline is seen as a right of passage, a need and a right to secure pathways for citizens and freight to move around the globe. This will change. As the airline industry realigns itself and governments have other priorities in their bailout lists, national airline entities’ structure will be rewritten. While the brands may still exist, the actual airline itself will no longer have sovereign status, instead owned across borders. Trans-Tasman, Pacific and Antipodes may feature in naming conventions as well as ownership ones.
#20 Four Day Work Week
A four-day work week has been touted prior to Covid and may get some traction. This is not the prediction. As union membership swells and the millennials deal with one of their first world events, we will see employees putting demands on business owners to give them what they want. Entitlement has been a growing phenomenon and will continue to be so. However, business owners will have their own view on reality and their pushback will be harsh. The protection afforded to employees through employment legislation has long-inhibited business owners from taking action due to the consequences of getting it wrong and being fined as a result. The new norm will be to factor grievance cost into any process and take decisive action quickly, and either have insurance or self-insurance to ‘mop up’ after the event. Employees will get stronger, but so too will employers. The drive to automate many roles will be ever-increasing to avoid risk.
#21 Stmulating the Economy
As a general rule, governments in the post-Covid environment are trying to stimulate economies through spending. Shovel-ready projects, grants, interest-free loans, and relaxing of legislation are all stimulators. However, most people have got used to five weeks of lockdown and enjoyed the simpler pleasures in life. Hermit-like behaviour is now almost welcomed. With a simpler life, the need not to spend has been realised and could in time be an absolute need for many. Austerity measures are therefore led by the individual, not the government in this scenario. The very economy the government is trying to stimulate is not the same economy which now exists. Post Covid Business Predictions
#22 Predicting the Curve
VUWL: Not a word that you are familiar with? As economists and big data people try and predict what the curve will look like on their graphs, any number of letters have been trotted out to predict what will occur. The reality is more likely to be all of them; the sharp drop of the V, the flat base of the U with a quick rebound, the undulating if not rollercoaster of the W and the long base of the L all have merit. However, a safer bet is that they will all follow on from each other as different stages as decline and recovery occur, and reoccur, and reoccur. It’s a marathon, not a sprint. However, in this marathon there is a sprint, 200 metre, 400 metre, 800 metre, 1500 metre, 3000 metre and 10K race included for good measure and cross-training purposes!
