From today’s vantage point, the long-term impacts of the pandemic are hard to quantify. What is clear, however, is that COVID-19 and the lockdowns that resulted have accelerated key trends, and that in certain important respects, life will not return to pre-pandemic norms.
“We are living and working at an extraordinary moment in time,” said Clare Francis, regional head – client coverage, Europe, at Standard Chartered Bank, facilitating a session on the hefty challenges facing the world at this year’s ACT Annual Conference. “The world is facing phenomenal challenges… Yet this is also a time of unprecedented potential.”
Francis and the panellists looked at five ways the world is changing, and discussed ways businesses and treasurers can engage with the opportunities.
Innovation – smart manufacturing, digital transformation and greater connectivity – are high on the corporate agenda. Against this backdrop, there is recognition that these innovations must be pursued collaboratively and in ways that attract and foster talent.
Bicky Bhangu, president – Southeast Asia, Pacific and South Korea at Rolls-Royce, said that while high-value manufacturing presents great potential, it brings an imperative to leverage local and diverse talent. In Singapore, for instance, Rolls-Royce taps into a vibrant ecosystem that includes government and industry groups, as well as academia.
“This is a great advantage when managed well,” said Bhangu. “That is done by inclusive management, by understanding the diversity and embracing that creative thinking.”
The trend towards flexible working has been given a tremendous boost by the pandemic, and hybrid working will be a definite marker of the new normal. However, there are significant cultural and geographical variances. The desire to work from home has proved much stronger in Europe than in Asian cities such as Hong Kong and Singapore, Ian Chisholm, group treasurer at Grosvenor, pointed out. Hybrid working also has limitations.
“Companies will need to find that balance in how they respond to that great desire to work flexibly without losing the corporate culture that is generally built up in the office,” he said.
Hybrid working and greater collaboration opens up big questions around the future of cities and urban centres. Costas Markides, professor of strategy and entrepreneurship at the London Business School, predicts migrations away from cities, and the transformation of larger offices into co-working spaces.
“We’re going to see tremendous change in the design of our cities,” he said.
The growth of Asia and the 10 countries within the ASEAN region in particular has been remarkable, and their primacy in world trade should not be underplayed.
Southeast and South Asia account for nearly 30% of global GDP. The 10 ASEAN countries have a close focus on furthering cooperation on economic, political and security issues. Meanwhile, GDP growth rates within Southeast Asia and ASEAN are significant, averaging 5% per annum. On this trajectory, ASEAN is forecast to overtake the EU and Japan to become the fourth-largest economic region in the world by 2030.
ASEAN countries are positioned to provide greater resilience in global supply chains, as Bhangu pointed out. At the beginning of the pandemic, ASEAN market players were successful in making quick adjustments to trade routes and diversifying sources.
“Across industries, what we’re starting to see now is the shift of priorities from low-cost sourcing to supply-chain resilience,” he said.
Whether through electrification of vehicles, greater fuel efficiency or greener building materials, sustainability goals are now firmly strategic business imperatives. Companies must set ambitious and structured targets to lessen their environmental footprint.
Building and building conservation is an area ripe for action. Environmentally friendly construction methods and materials are coming on stream. Measures to make historic buildings more energy efficient, however, have so far lagged behind.
A report from Grosvenor Britain & Ireland argues that this needn’t be the case. A coordinated approach that aligns planning policy and heritage protection with environmental goals could help in the transition away from carbon.
Grosvenor estimates that fabric improvements to England’s 500,000 listed buildings could deliver carbon savings equivalent to 5% of the emissions associated with the UK’s entire building stock of 2019.
Sustainability is also an important consideration when it comes to attracting talent. Companies with greener, more socially inclusive cultures make more credible career propositions for young talent, in particular.
For businesses, the legacy of the pandemic should be that we permanently rid ourselves of the idea that we can exist in a steady state, Markides argued.
“We live in a world of continuous disruption. While we respond to one wave, another one hits. The challenge is not: how do I respond? It is: how do I organise the structure, the culture and the processes of my organisation so that no matter what hits us, we are ready to face it?”
Liz Loxton is editor of The Treasurer and a freelance business writer
• Bicky Bhangu, president – Southeast Asia, Pacific and South Korea, Rolls-Royce
• Ian Chisholm, group treasurer, Grosvenor Group
• Costas Markides, professor of strategy and entrepreneurship, London Business School
View the entire ACT Annual Conference session: The Great Reset.
