In devising economic strategies for a post-Covid world, the Emerging Stronger Taskforce is working on the premise that there will be no return to the old normal, even after the health crisis recedes.
To this end, the task force has identified six shifts from which opportunities could emerge, said Minister for National Development Desmond Lee and PSA International group chief executive officer Tan Chong Meng, its co-chairs. These six key shifts that are reshaping the economy have been accelerated by the health crisis, they added.
• One shift is a change in the global order. As the direction for geopolitics shifts towards Asia, intra-regional trade flows could grow, said the task force.
• The pandemic has also laid bare the drawbacks of supply chains pursuing efficiency at the cost of resilience, as companies and countries found themselves without buffers to overcome disruptions on a global scale. This could lead to a rebalancing between "efficiency" and "resilience" in supply chains, which may result in shorter supply chains with production bases located closer to consumer markets, and stockpiling of essential materials for production, said the task force.
• With people forced to stay at home to stem the spread of the coronavirus, consumers turned to online shopping and digital technologies to keep in touch with family. As a result, businesses have had to speed up digital transformation and innovation, and this could alter the way business is conducted, said the task force.
• Another shift is in consumer preferences, which have not returned to pre-pandemic norms. The task force said demand for e-commerce, e-services and digital channels will increase, and there will be a growing emphasis on services that affect individual health and wellness.
• Covid-19 has also brought an increased focus on environmental, economic and social sustainability, which could result in new business opportunities such as in the green economy.
• With significant pressure on businesses, industry consolidation and churn will also accelerate. The task force said large private companies will reinforce their market dominance, and those with available capital can acquire distressed assets, leading to industry consolidation. There may also be more caution in investments due to higher debts and greater uncertainty.