COVID-19 SPECIAL

New economy will emerge from new normal after pandemic

The crisis may have created uncertainty, but it has also led to opportunities that will see sectors emerge or grow, while others vanish

The greatest global pandemic in over 100 years has created chaos, threatened lives and livelihoods and brought much of industry and commerce to a standstill.

While the pandemic has created uncertainty, it has also created new markets and opportunities for the post-Covid-19 era.

After all, this crisis has shown us how we can change the way we work and play.

Businesses that were previously in the peripheries could grow. Perhaps no more so than those occupying the digital space.

THE DIGITAL LEAP

Around 80 per cent of the white-collar workforce are deployed under the work-from-home regime, creating a cottage industry in everything from e-meetings and e-seminars to e-sales and e-marketing.

Online teleconferencing, chats and discussions and digital marketing have all sped up the journey towards a digital economy.

With Web conferencing exploding, companies offering support services for webinars will do very well in the new normal. New opportunities have also emerged for telcos, Internet service providers and vendors of computer accessories.

The advent of 5G will accelerate these trends and opportunities.

There are even opportunities for furnishing and home renovation companies and interior decorators who can create functional and comfortable home offices.

But remote working arrangements and telecommuting will also raise challenges in online security, stability and bandwidth capability.

 
 

Companies that can provide data storage, technology support, secure platforms, cyber security and even backup facilities will see demand for their services grow rapidly.

The same goes for those in the education space. The closure of schools has forced the entire education system to embrace e-learning.

An entire new pedagogy will have to be devised.

Singapore has been a leading player in many fields, ranging from medicine and digital technology and banking to supply chain management and education. This crisis provides it with an opportunity to solidify its leadership position in all these segments.

Besides schools, this will also open opportunities for providers of online tuition, both in software and curriculum development.

Beyond learning, this crisis has also catalysed the growth of home entertainment, video streaming and e-sports. For example, the Singapore Esports Association based here has been busy putting together a community e-gaming programme and has been engaging with businesses and entrepreneurs.

The market for e-sports and entertainment will continue to grow.

Online retail, which was already gaining traction with the millennial generation before the pandemic, will also accelerate in the post-Covid-19 economy.

Companies and individuals whose businesses support this new e-commerce reality, spanning the entire belt from logistics to last-mile delivery, stand to benefit.

 

The acceptance of e-commerce is also likely to spread beyond traditional goods and services like consumables, groceries and food.

Some real estate players have started venturing onto online platforms to market new projects. For example, property portal ShowSuite has started helping developers market properties online, including fulfilling the protocols for all paperwork seamlessly on its platform.

Could we see more developers turning to online sales, instead of paying property agencies hefty commissions to sell their new projects?

Opportunities abound to capitalise on this digitalisation trend, not just in real estate, but in other business segments as well.

In a similar vein, this crisis has taught many of us that aspects of physical banking may be more a luxury than a need.

Banks will have to rethink their branch network strategies. Besides rolling out more online services, they could consider alternative cash payment systems, such as counters at 24-hour convenience stores, to supplement the teller network.

Paperless billing could also increase, while cashless payment systems will gain more traction.

 
 

After all, reducing the handling of physical paper or bank notes can also reduce the likelihood of viral transmission.

The net impact would be a lower cost of doing business and higher efficiency for both banks and businesses.

Could this be just the crisis digital currencies needed?

The pandemic has also forced the wealth and asset management sectors to devise new ways of engaging clients.

The wealth management industry, in particular, has been on the low end of financial technology and works very much in a paper-driven world.

This has kept the cost-to-income ratios high. But this crisis has forced a reckoning, with the industry deploying more technology than it has in the last decade.

The industry should also perhaps look at using more independent asset managers and lowering the emphasis on its product-driven approach.

The regulatory environment may also need a relook.

BUILDING ON CAPABILITIES

Singapore has already proven itself to be an important node in the pan-Asian supply chain game but this crisis could strengthen its hand.

The long queues and empty shelves at supermarkets have been seared into the psyche of the average consumer and raised the spectre of supply shortages for everything, from toilet paper to tea.

 
 

As a result, supply chain management has evolved from being a nebulous phrase used by industry specialists to becoming part of the vocabulary of the average shopper.

For a small nation such as Singapore, it is a strategic imperative to ensure a steady and reliable supply of goods from a diversified base of suppliers. Businesses that can make this happen will do well.

Singapore must build up its domestic food production capability via biotechnology and specialised farming. There is potential to achieve some level of self-sufficiency via agri-farming ventures such as fish farming, poultry and eggs.

There are also opportunities for companies that can effectively apply advanced technology to farming via hydroponics, aero farming, aquaponics or other forms of food production.

Given that this is a crisis created by a pandemic, the healthcare sector could see a huge transformation during the post-Covid-19 era.

Government spending on healthcare to avert or prepare for future pandemics is likely to increase, in turn creating opportunities for companies in this segment.

The demand for healthcare products and personal protection gear, be it protective garments, masks, gloves or other products, will not disappear any time soon.

This pandemic has also underscored the importance of having a sufficiently large pool of trained healthcare workers.

More training facilities will need to be established even as Singapore imports more healthcare workers, not just to cater for pandemics but also to prepare for an ageing population.

Pharmaceutical and medical tech companies will also be in focus as the search for vaccines, cures and therapeutics becomes critical in the post-Covid-19 era. The future for Singapore's biotech and biomedical sectors remains bright.

Demand for telemedicine could also grow as people avoid going to crowded clinics for minor ailments.

 
 

This pandemic has also created greater awareness about the need for insurance that covers comprehensive hospitalisation, critical illness and disability, and life policies.

Insurers that can offer innovative coverage for such eventualities will become leaders in their game.

The new normal will create a new economy: Some industries will disappear; others will grow; new ones will emerge.

Businesses that can cater for a faster, cheaper and more convenient future will find new opportunities. Individuals who can think out of the box and devise unconventional solutions to complex issues will find a niche in a new marketplace.

Singapore has been a leading player in many fields, ranging from medicine and digital technology and banking to supply chain management and education.

This crisis provides it with an opportunity to solidify its leadership position in all these segments.

As the old adage goes, every threat creates its own opportunities.

 
A version of this article appeared in the print edition of The Sunday Times on May 10, 2020, with the headline 'New economy will emerge from new normal after pandemic'. Subscribe