We look at how to invest in a more indebted, less global and more digital post-covid world.
The corona epidemic
Too much has been written on and talked about the corona pandemic that has threatened the entire world population and caused many victims.
If not everything is nonsense and chitchat then surely a large part. In the first place by the WHO, the politicians, but also by many genuine or pseudo-scientists, not to mention the prophets of doom and some would-be futurologists.
For the sorrow of the victims and their relatives, we consider it our primary duty to commemorate them.
Some facts are indisputable:
Today more than 1,000,000 persons worldwide have died and so many families are in mourning.
In addition, we should establish that the WHO, the UN, the European Union etc. have done little to nothing to give clear guidelines regarding the way to combat the virus. We also observed a total lack of solidarity between the countries and witnessed that the slogan “every man for himself” is the rule.
Some countries have performed better than others and, strangely, the EU, with a few exceptions, the UK and the US have performed almost the worst of all.
How the coronavirus originated is still unclear and it may or may not remain so. How it was propagated is obvious. Ever since sedentary culture has existed, man has been a social being and needed contact with his fellow tribes. As long as he lived in his village, this was limited to that small group of fellow villagers and communicable diseases also remained within the same circle. Gradually people moved outside their village to the city or to another country and eventually through globalisation to all parts of the world.
It is unmistakable now that globalisation has proved flawed. Globalisation, which was partly brought about by the evolution of telecommunications and the millions of flights with travellers who constantly leave from and go to different corners of the globe, be it for work or as a tourist, and who wiped out the borders.
However, globalisation has not only contributed to the progression from epidemic to pandemic, but has also failed to provide a global solution, because its formula apparently only functions according to economic patterns and not at all on health level.
As long as no proper vaccine or other medication is being found, guesswork remains about the end of the pandemic, human misery and its economic consequences.
Without any doubt a heavy toll will have to be paid. After all, the world will have more debt, so fiscal pressure will be more important and, apparently, there will be more protectionism and less globalisation.
This globalisation has made the big multinationals wealthy by producing products in low-wage countries for mass consumption in richer countries.
What is the benefit of being able to manufacture cheaper in India, China or Brazil if those countries at a certain point are no longer able / willing to supply? Who is going to rely on a foreign supplier of a vaccine, since he will in any case first cover his fellow countrymen or friendly countries?
Maybe it would be advisable to manufacture here again and buy a little less, if necessary.
New trends & opportunities
Of course, the way of living and working will present changes, adjustments or acceleration of trends. Teleworking, homeworking, e-commerce, adapted architecture to improve the quality of life in cities and housing in the event of a new lockdown and so many other thingsFor example, a large part of the new generation will want or need to be more mobile and ever more people will rather rent or share than buy movable property, including cars, and real estate.
No matter if one buys or rents, economic and industrial life must go on, public health and care services must be improved, tourism will continue to exist but new formulas must be considered and the pandemic will hopefully encourage us more to not only reflect on our health challenges, but also on those of our planet.
There is much more to mention, but this is already enough material to show that if changes appear, there must also be ingenuity on the part of the economic fellow players, and existing classical patterns and logarithms need to be revised or invented.
We, as Business Clusters, believe in it and hope that we can help and assist others longing to take advantage of these times to use inventive / innovative opportunities.
Let’s keep up the good spirit.
Rik de ridder October 2020