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Over the years, economists have talked about the “post-war economy,” the “post-industrial economy,” and the “post-Brexit economy.” Now they are talking about the “post-Covid-19 economy”.
It hasn’t reached us yet: Covid-19 is still raging around the world.
But some of the contours of the economic future are already in sight. And for Singapore, as for many other countries, there is bad news and interesting possibilities.
Let’s start with the bad news. Amid increasing social distancing and the possibility of circuit breakers turning on and off, what will emerge will be more of a “low contact economy” in which public gatherings will be limited, family travel and activities like socializing will be restricted , eating out and big events – conferences, concerts and sports tournaments – stopped.
A new generation of white elephants may also temporarily emerge in the form of mega-malls, high-rise hotels, large office buildings (as more people will be working from home), cruises, jet fleets, and major events.
These will return at their own time, but for the foreseeable future they will be empty or will operate well below capacity. The same is true for the oil and gas sector.
In various industries, bankruptcies and layoffs will increase. Companies will try to minimize the permanent workforce and draw on more contract workers. The concert economy will expand: Many workers will work temporarily for multiple companies at the same time. The labor market will be transformed.
Trade patterns will also change as supply chains change and countries try to restore more production.
There may also be an increase in protectionism, at least in the short term, as countries move to protect favored industries from competition amid recessions and job losses.
There is also evidence of export protectionism, with countries restricting exports of medical supplies, pharmaceuticals, and even food, and there are signs that the U.S.-China trade war may flare up again.
NEW OPPORTUNITIES
But, as always happens during periods of crisis and change, there will also be new opportunities and areas of growth.
Although many industries are depressed, one exception is the medical and pharmaceutical industry that is on the cusp of a boom, and many countries around the world are likely to increase health spending, even after the Covid crisis- 19 decrease.
Singapore is exceptionally well positioned in this area, with more than 30 of the world’s leading medical and pharmaceutical technology firms that have established manufacturing and research and development (R&D) facilities here.
Singapore’s biotech sector is also promising. Last year, it launched a new consortium called the Target Translation Consortium, to coordinate drug discovery efforts at early stages in government agencies, healthcare institutions, and universities.
In the context of coronavirus-related research, scientists at Singapore’s Duke-NUS School of Medicine have joined the global race to develop a vaccine and plan to start clinical trials later this year.
While vaccine development is the holy grail in the battle against Covid-19, there are possibilities in other areas as well, such as biologics, including the development of antibody cocktails that can treat patients with the disease, as well as the drug development and test kits, to which Singapore can also contribute.
Several Singapore companies have already developed test kits, including some that can give accurate results in 10 minutes and do not require specialized equipment or trained laboratory personnel.
These successes not only represent important steps to control the spread of the pandemic, but may also have promising commercial potential.
In all industries across the board, the post-Covid-19 economy will lead to an acceleration of several trends that were already in their infancy.
One of the mega trends we will see is the rapid expansion of digitization as remote work becomes the new normal.
Singapore has an advantage here, with its Go Digital and other programs offering pre-approved digital solutions with grant support that many other countries don’t. This will allow thousands of companies to transform relatively quickly to operate digitally. This capacity will be the minimum entry ticket to operate in the post-Covid-19 economy. But companies and workers will have to adapt to this new world.
REMOTE WORK, REMOTE HIRING
The rise of remote work will present opportunities and challenges.
On the positive side, it will allow companies to save on real estate, utility, office supplies and infrastructure costs, as well as travel costs for employees. But remote work will mean not just working from home, but working from anywhere. This means that more companies will be able to hire the best from anywhere in the world.
In all industries across the board, the post-Covid-19 economy will lead to an acceleration of several trends that were already in their infancy. One of the mega trends we will see is the rapid expansion of digitization as remote work becomes the new normal.
The e-commerce boom could be permanent as people’s shopping habits change and more retailers connect. Singapore is already well served in e-commerce, with established players like Amazon, Qoo10, Lazada, Shopee, and Carousell, as well as industry-specific players like Sephora, FairPrice, and Gymsportz. More niche players could emerge.
3D printing is an enabling technology in which Singapore could increase its investments in the post-Covid-19 economy to build a competitive advantage, and its potential applications are endless. In short, Singapore could accelerate its move to advanced manufacturing.
As a result, some categories of Singapore workers, especially those in white-collar jobs, will face tougher competition as the job market becomes more global. But they will also have more opportunities to work for companies outside of Singapore.
Businesses will also be able to serve customers and clients worldwide, digitally. And not only companies, but also educational institutions, through massive open online courses, and doctors and hospitals through telemedicine.
Remote learning and remote medicine will move from the fringes of their industries to the mainstream in the post-Covid-19 economy.
The low contact economy will lead to a boom in e-commerce, which is already noticeable. More and more retailers, restaurants and even wet markets are connecting, a trend that will accelerate with the launch of the eCommerce Booster Pack last month by Enterprise Singapore, which covers 90 percent of online installation costs for new retailers to electronic commerce.
The e-commerce boom could be permanent as people’s shopping habits change and more retailers connect. Singapore is already well served in e-commerce, with established players like Amazon, Qoo10, Lazada, Shopee, and Carousell, as well as industry-specific players like Sephora, FairPrice, and Gymsportz. More niche players could emerge.
The rise of electronic commerce would stimulate the growth of related services, such as web design, digital marketing, and content management.
The national logistics industry will also grow as e-commerce takes off and becomes more entrenched.
MANUFACTURE OF “LOW TOUCH”
Manufacturing will also become more “low contact” in the post-Covid-19 economy. This means automation will be accelerated, with increased use of robots, more remotely controlled processes and 3D printing. This can benefit Singapore by helping to neutralize its relatively high labor costs.
Singapore has had a National Robotics Program since 2015, which has since been expanded. Work is being done on packaged solutions for small and medium businesses.
Singapore had the highest density of robot to human in manufacturing last year, according to the International Federation of Robotics.
The fastest drive towards robotics in the post-Covid-19 economy will transform not only manufacturing, where robots already perform tasks such as product assembly and testing, but also the healthcare, construction, logistics, and healthcare industries. other industries. For example, autonomous transporters are already being used to move supplies efficiently and dispense medications in hospitals.
Some hotels are already using indoor “robobutlers” to deliver food, drinks, and bedding.
3D printing is another area that will gain more prominence in the post-Covid-19 economy as manufacturing is further restocked and low-contact processes are favored. Singapore has a national center for 3D printing at Nanyang University of Technology (NTU), as well as several companies active in this space, although many of them at an early stage.
But 3D printing has enormous potential to transform not only manufacturing but other industries like construction as well: Last year, NTU researchers 3D printed a bath in nine hours, medical care, for example, through implants 3D printed doctors and even fashion, through 3D printed clothing.
3D printing is an enabling technology in which Singapore could increase its investments in the post-Covid-19 economy to build a competitive advantage, and its potential applications are endless. In short, Singapore could accelerate its move to advanced manufacturing.
NEED TO PIVOT
One could think of many other industries that are also promising in the post-Covid-19 economy in which Singapore could develop capabilities and where companies are already operating, from urban agriculture and green energy technologies to hygienic packaging, electronic and electronic sports. . games, which are already larger than the global combined film and music industries.
But companies will need to pivot to take advantage of new opportunities. They would also have to continue investing in R&D and innovation during the crisis, rather than just focusing on reducing costs. Research by management consultants shows that those who do it perform better than their competitors after a crisis. People will also need to re-adapt for a more digital, automated and competitive world.
Therefore, amid all the pessimism that the Covid-19 crisis will create, there are also silver trimmings and even more will come into view.
The challenge for Singapore Inc will be to spot them early, adapt quickly, and execute well.
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