OVER THE PAST few decades, we’ve seen technology playing an increasing role in the economy, which has raised questions about how its increased efficiencies would change the nature of the future of business.
The Covid-19 pandemic, as historian Yuval Harari has noted, will fast-forward history. In the sphere of business, it certainly will. The crisis is forcing corporations to rethink how they operate in a world of physical distancing.
Businesses and industries that innovate – and quickly, given how fast the ground is moving – will be able to keep their heads above water and prosper as they better adapt to whatever the new normal will be.
Contact engagements are becoming a thing of the past, and although most businesses are reporting declining revenues in the face of global lockdowns, online business giants such as Amazon are growing.
These changing times were evident to me as Facebook founder Mark Zuckerberg announced that the Silicon Valley-based giant was launching a “shops” feature that allows a small business to sell directly from social media platforms such as Facebook, Instagram and WhatsApp, for free. It’s a new way for commerce to sell directly to customers, changing the landscape for conducting business.
These and other changes will drive disruption in the jobs market, and one wonders what will happen to traditional marketing channels. To preserve jobs in an environment of high unemployment, business and the state will have to be innovative to avert an even greater economic crisis that will emerge from these changes.
One welcome example of such innovation from the state is the allocation of temporary emergency spectrum to internet service providers for the duration of the national state of disaster. Following a request from the government, the Independent Communications Authority of South Africa (Icasa) invited operators in early April to apply for emergency spectrum to meet the spike in demand for bandwidth triggered by the many businesses operating from home during the lockdown.
This spirit needs to be extended beyond the lockdown. Icasa has made it clear that this is a temporary arrangement and does not affect the process for the permanent assignment of spectrum. Yet the auctions to allocate permanent 4G and 5G spectrum licensing have suffered repeated delays. One hopes that is a characteristic of “preCovid South Africa” and post-Covid is marked by less intransigence and more innovation, with quicker reactions to business’ requirements. Certainly, the need for permanent spectrum licensing will be more pressing as more and more business is conducted online in the post-Covid environment.
There will be a shift in many industries, such as the retail sector, which must be asking whether it is too heavily exposed to the malls that dominate our cities and towns.
The automotive sector, historically reliant on showroom floors that are owned by some of our large listed companies, has had to rethink that format because of falling foot traffic. Covid-19 will add impetus to this review.
Furthermore, there’s no doubt that, over the past few months, many businesses have learnt to operate from home. Do they keep their office space with the overhead costs?
In education, social distancing will disrupt the norm. In a recent webinar, UCT vice-chancellor Mamokgethi Phakeng said we’ll have to create conducive environments for students to learn, such as ensuring learners have the right equipment, signal, data, living conditions and nutrition.
There has to be a shift also from a regulatory perspective in cross-border education where what is taught in one country is relevant or acceptable to others.
Under level 4 of lockdown, restaurants have been allowed to operate on a delivery-only basis. It’s a shift to which many have struggled to adjust, but even when we eventually reach level 1, will they really operate normally again? How will some restaurants manage physical distancing with limited space, given that their business model is based on high numbers and low margins?
With international air travel likely to remain banned for an extended period across much of the globe, South Africa’s tourism sector is set for an existential crisis. When we finally reach level 1, there’ll be pent-up demand for some local travel, but there won’t be for the international traveller. Pricing models geared towards this clientele will have to change, and innovative price packages will be needed at some of our five-star resorts in places such as the Kruger National Park.
Although Covid-19 poses a significant challenge for our healthcare sector in the immediate future, as we try to ensure that the minimum number of lives is lost, in the medium to longer term it will test the innovative capabilities of both business and the government.
It is through them business will survive and be resuscitated and the government will reap the taxes to help offset the worst impact on the most vulnerable segments of society.
This article was first published in Business Report