Six major implications that COVID-19 has on MENA’s businesses
Here’s my attention-grabbing intro: Business is not ‘as usual’. If you haven’t heard already, the world will change after COVID-19. Throughout my career, and especially during my last three positions, I had considered building a work-from-home policy, but the thought remained on the backburner, never coming into fruition. Now, COVID-19 has become a catalyst for the inevitable: remote work and many other innovative solutions.
It goes without saying that the COVID-19 crisis will drastically alter the way governments, companies and organisations do business - and that industries will be differently affected. For instance, while the oil & gas, airlines, travel, automotive, events, hospitality and traditional retail industries will suffer, e-commerce, gaming, streaming, and video conferencing platforms as well as pharmaceuticals, logistics and delivery sectors will benefit.
I’ve outlined a few of the most apparent implications of COVID-19 on business.
Companies will need to reconfigure their supply chains to be more agile, shifting away from fragile global suppliers to more ‘near-shore’ or local production facilities. One of the most immediate effects of the novel coronavirus pandemic on the global economy was a serious disruption to supply chains. For example, Apple’s supply chain, which is largely dependent on China for key iPhone components, faced total stoppages due to the virus outbreak.
Business travel has already declined and will continue to do so for the foreseeable future. According to Global Business Travel Association (GBTA), the global business travel industry is expected to face losses of about $820 billion in revenue. This virus will likely change the nature of business travel completely, compelling corporate travelers to adopt digital teleconferencing tools, like Zoom, GoToMeeting and Google Hangouts, in place of face-to-face meetings.
Office rents are expected to drop significantly over the coming harrowing months, as personnel practice social distancing and work from their homes. In general, demand for commercial real estate space will likely wane as layoffs or furloughs take effect, further contributing to lower monthly rents – at least for those firms that survive. Companies will permanently decrease their office space, as they will find that certain positions do not need to be housed in the office.
As organisations increasingly shift to remote work, I believe they will need to adapt to a new goal setting and tracking system known as objectives and key results (OKRs). Not only does this technique offer business agility and greater autonomy during times of crisis but also allows for employees to be judged on their deliverables and results. The use of OKRs helps to generate transparency within a firm, which accordingly increases trust between employees and management
On the upside, connectivity will improve in the next several months, as businesses and organisations scramble to operate remotely in the face of the coronavirus outbreak. More specifically, I anticipate a rising demand for 5G technology and its essential rollout as a result. With enhanced digital connectedness, employers can efficiently use teleconferencing platforms and hospitals can remotely accommodate patient visits.
Though the coronavirus pandemic will spark an economic downturn littered with layoffs, bankruptcies and stock market dives, it will also spur increased automation, among other digital innovations. For various sectors, like e-commerce, manufacturing and distribution, robots and drones will gradually replace human laborers. Smart city solutions in the form of greater city-wide connectivity, location tracking and surveillance will also grow as communities adapt to current and future disasters. Expect the development and adoption of more online tools during this crisis; after all, Slack and Zoom all emerged during the last recession in 2008.
Lastly, while digital maturity was once a plus, in today’s post-corona economy it is a necessity. In fact, a digital transformation plan will be vital to the success of nations and businesses alike; companies and organisations that don’t have a strategy will start working on one as soon as possible, this is no longer nice to have but a must-have. We are at a major crossroads where we must leverage technology to ensure resilience and business continuity.
Consumers, organisations, governments, and institutions must become so comfortable with the digital space that they transform their behaviors. Now. Before the next corona rebound, natural disasters or financial collapse strikes.
E-commerce deals in MENA-based startups have tripled from 2016 to 2019. Find out more details behind this trend and many more in our 2019 MENA E-commerce Venture Investment Report HERE