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Year in Review: Five business trends in 2020
By Goh Puay Guan
SINGAPORE — No one wants to talk much about this year, except commiserate about lost opportunities and personal inconveniences. COVID-19 has made a large impact on the world. Looking back at 2020, here are five business trends that have changed, and may change our lives in future.
Disrupted, yet connected
In past recessions, some economies sank while other economies stood their ground. In 2020, however, most economies are expected to shrink. This shows the extent to which trade, supply chains, and travel have connected the world. Whilst recovery has started, it is uneven across different sectors and countries.
The pandemic has cut off some of these connections, but not totally. Global operations were still able to continue, albeit with some inherent inefficiencies. The use of videoconferencing for meetings and internet-based CCTVS to monitor operations meant that remote management was still possible. Leaders may see the merit of saving time and cost in reducing business travel.
More Internet of Things
The Internet of Things (IOT), which connects physical objects either directly or through sensors attached to them, has made its presence felt even more this year. Temperature sensors in public areas are now a common sight. With restricted clinic and hospital access, remote diagnostics and remote monitoring in healthcare become even more important. Technologies such facial recognition, kiosks, chatbots and contactless payments are used to minimise human contact and operating costs in hospitality and retail.
Changes in consumer and work behaviour
With global lockdowns, many people are working from home. Hybrid work arrangements between home and office are likely to be implemented even in the future. When people stay home, e-commerce grew while traditional retail stores took a plunge. Robinsons in Singapore became the face of yet another heritage brand that could not survive the times and crisis.
There could be peripheral effects on the business ecosystem. In the United States, it is expected that the effects of work-from-home and online shopping will reduce the incentive to own cars.
More focus on supply chain resiliency
Supply chain resiliency has become a buzzword, as companies seek to ensure that their operations continue uninterrupted. These include diversification of sourcing, ensuring sufficient inventory, and looking into alternative manufacturing locations, including nearshoring and onshoring.
Governments seek to ensure access to critical supplies of food, medicine, medical equipment, and energy. In the area of food security, new technologies such as vertical farming, urban farming, meat alternatives and lab grown food are expected to shorten the food supply chain and reduce food wastage. Alternative meat producer Beyond Meat saw a huge surge in its share price this year on the expectation of high demand. Singapore has become the first in the world to approve lab grown meat for consumer consumption.
Creative use of physical assets
Various businesses have tried to find ways to improve their utilisation of space when demand is reduced. Hotels open up their rooms and lobbies as workplaces, or offer “daycations” where guests can use their facilities for the day. In Europe, airports have used their tarmacs as open air movie theatres or terminals as concert halls. Airlines such as Singapore Airlines opened up their airplanes for in-flight dining experiences. Nightclub Zouk turned its dance floor into a spin studio by day and cinema by night.
Retail stores have converted their operations to “dark stores” and “urban warehouses”, using their stores as fulfilment centres to e-commerce customers in the city.
As the saying goes, necessity is the mother of invention. Businesses and societies have learnt to adjust. It remains to be seen how these trends turn out as we enter the coming year and decade.
Goh Puay Guan is an associate professor in the Analytics & Operations Department at the National University of Singapore (NUS) Business School. He is also the Academic Director of the NUS MSc in Industry 4.0 programme. The opinions expressed are those of the writer and do not represent the views and opinions of NUS.
