What does it look like and what do we in business need to do?
Restrictions are starting to lift worldwide and there is an inevitable rise in positivity around the international business community. However, we now also understand that the world after COVID-19 is unlikely to return to the world that was. Many trends already underway in the global economy have been accelerated by the impact of the pandemic, and this is especially true of the digital economy. With the rise of digital behaviour, such as remote working and learning, telemedicine, and with virtual reality environments replacing the physical, change has come quickly – along with the need to adapt to and facilitate those changes.
Our analysis suggests that one of the major trends affecting multi-nationals will be deglobalisation; the logistical difficulties brought to light by the current crisis, together with growing international political uncertainty, are already pointing to a shift away from global just-in-time supply chains and a change in partnership priorities. We foresee that, as economic difficulties increase, the inevitable growth of “my nation first” politics will push companies to re-think their international relationships and to localise business operations in a way that favours national and regional supply chains.
A second major trend, China’s geopolitical rise, has been more than three decades in the making. But while China has successfully transformed itself into an economic and technological superpower, tensions are growing with the other key player, the US, which has the potential to affect us all in the next few years. We believe it is increasingly likely that, once the world emerges from the current pandemic, there will be a shift towards a new economic and political cold war, this time between the United States and China - where many countries, especially in Europe for example, will find themselves caught in the middle of this battle for economic supremacy.
The outlook for business
A recent McKinsey global survey finds that, with respect to their companies’ prospects, executives remain optimistic—and increasingly so. For the first time this year, respondents are more likely to say the size of their workforces will increase than to predict a decrease.
Yet responses to this survey also suggest some emerging threats to company growth. While weakening demand and changing customer needs remain the top-two risks (as they have been in the previous four surveys), the share of respondents citing demand concerns is the lowest it has been since March. At the same time, industry competition has risen in the ranks: it is now selected as the fourth most often cited concern.
In the future, it is also predicted that Europe and the US will loom less large in the global economy as emerging countries outperform their growth. That is inevitable. What we do not know is how fast that US and European dominance will be reduced, as that depends in part on policy choices made today. On that score, US President Joe Biden has delayed his country’s relative decline and his recent $1.9tn fiscal stimulus package is forecasted to add one whole percentage point to projected global growth.
In other countries, the Bank of England has recently unveiled a £100 billion stimulus package to help boost the UK economy and, as of March 2021, most G20 member countries had committed to fiscal stimulus packages in order to attempt to soften the effects of the coronavirus pandemic. Out of all G20 countries, Japan had passed the largest fiscal stimulus package at close to 20.9 percent of its gross domestic product (GDP). This package amounts to around 117.1 trillion Yen. (Note our September blog 'Why Japan?
So where does this leave those of us in business as we plan our future and our growth strategy? How do we address shifting customer and partnership priorities, increasing global competition, the trends in digitalisation and an uncertain political future? At Dragonbridge our approach is as follows:
Customer retention and competition: Continue building trust in your brand, re-shape your messages to market to better engage with your customers and prospects and their needs in 2021. Position your company as the market leader in your sector via thought-leadership articles in the media where our customers go for credible information. Understand your customers and your competitors so you are able to drive your USPs and distinctive values home. Remember, to differentiate yourself from the crowd and to engage, content is still king!
Digitalisation: A big subject. But for sales & marketing professionals it is important to accept that large trade shows, events and unfettered business travel will not be back for a while, so re-work your strategy to focus on smaller face-to-face events with higher value customers, prospects and editors and embrace virtual reality (trade show booths, events, launches and factory walk-throughs) for your wider international audience. Drive footfall and data capture at these events through focused and targeted trade PR and media relations.
Future Markets: It is important to keep expanding your markets and exploring additional opportunities. Maybe your existing links, partnerships and relationships in markets such as the US or China are strong and will weather any forthcoming political or trade storms, but it’s always good to also focus on other growing markets such as India, the Gulf (think NEOM) and Japan for example, to take advantage of their increased economic activity and demand. A PR and marketing agency with an international footprint to drive your messages and reputation at a local, as well as a global, level will be invaluable.
For advice on how to shape your brand, PR & marketing communications strategy and deliverables to meet the challenges and opportunities of the future, call us at Dragonbridge Communications on: +44 (0)7833 121 510 or email: email@example.com.