Note: During times of disruption, data-driven trends analysis has limited effectiveness because the situation is new, and there isn't historical data to indicate what will happen next. I leveraged methods inspired by best-in-class forecasters like Institute for the Future to create these scenarios. Their purpose is to push the boundaries of our thinking so we are prepared for the full scope of possibilities that might emerge in the near future.
These forecasts give a vision for a range of industries on a 3-month to 3-year timeline based on research on historical patterns, anticipated regulations, and observations of the initial economic response and externalities of COVID-19 outbreaks. I also considered the industry context going into the pandemic and other forecasts about the pandemic. You can find a source list at the end.
Thanks, Shilpi Kumar
From fast fragile global networks towards resilient regional quality.
After great delays and major financial hits to the global manufacturing market, there will be a return to normalcy in 2021, with new expectations being driven by larger market players. Hinging on the Belt and Road Initiative from China, we will see many companies diversify risk by developing production capacity in other regions. While there might be outsourcing for suppliers and subsystems, manufacturing activities will start to consolidate into more regional value chains, moving production and sourcing closer to the end user.
This change will encourage expanding the use of robotics in production and inspection, adding even more requirements for protective gear and hygiene compliance to production facilities and warehouses, and investing in backup component inventory as resources become more available. Resiliency planning will involve flexible capacity and backup contracts with additional suppliers and vendors to diversify risks. Some of the smaller contract manufacturers will have to adapt their working capital to have greater flexibility, driving prices up across the board. With the increased expectation for resilience against viral outbreaks and natural disasters, governments will retain significant contracts with national manufacturers to provide emergency supplies.
There will be a shift from capacity for consumer goods, electronics, and luxury items to essential, disposables, and medical supplies. As a result, non-essential product brands will extend their product lifecycles, adopting expectations driven by the EU "Right to Repair" and add more time for contingencies to production schedules. There will be accelerated shifting of manufacturing capacity from dependency on China, Taiwan, and Southeast Asia, to investment in nationalized resources, with a bigger shift to Mexico, Central America, Sub-Saharan Africa, and the US.
From open supply chains towards autonomous short-haul deliveries.
There will be a slow reopening of borders in 2020, with increased cautions taken for foreign packages, increased controls on customs and movements of goods in wealthier areas. E-commerce will continue to thrive, with a tension between small local businesses who survived on extreme loyalty, and the behemoth platforms like Amazon and Uber that are taking cuts of all the transactions and taking care of the logistics. There will be an emerging use of subscription based services to get essentials delivered every week and many people will maintain some of the stockpiling purchasing after everything settles down.
As a result, there will be a surge of bankruptcies in retail, especially the department stores and franchises that fail to adapt or do not see the benefit of re-opening. The on-demand economy for take-out and services will reshape to incorporate an expectation of contactless transactions. As production and sourcing move closer to the consumer there will be an emerging opportunity for regional logistics, last-mile, and hyper-local delivery. International shipping rates will increase, but national trucking capacity will become even more dense and affordable as the first autonomous trucks are deployed. Drones play a role in smaller packages and hyper-local delivery. To support this new demand, open jobs will will be moving from retail jobs to on-demand delivery and short-haul trucking routes. This transition will also contribute to high unemployment rates, especially in the US.
There will be a higher compliance expectation for tracking, monitoring, and real-time knowledge of where a shipment is and the conditions of the handoff. There will be an interest in new packaging materials and containers that emphasize sustainability, reuse, and hygiene.
From multi-modal and always-moving towards driving from home
Quarantines will breed greater normalcy in a work-from-home, virtual entertainment, online conferences, and low-commute lifestyle for the average person, prompting more local mobility and use of bikes and scooters in certain urban areas. Global corporations will close offices in non-essential regions and there will be a significant drop in commercial air travel for business and pleasure. The government stimulus will save the major airlines, but the rest of the travel industry will suffer. Public transit will remain the sole option for a portion of urban populations with few alternatives and there will be increased expenditure of municipalities on cleanliness and fines for violations.
There is an opportunity for new forms of electric vehicles, the need for expanded charging infrastructure, and increasing adaptations of roads for walkability. The lower emissions from less air travel will be made up for by expanded car use as regional traffic will increase. Investment will continue to fuel VTOL and autonomous vehicle companies, though there will not be a meaningful change in usage in this period of time.
From middle meddling towards disaster modeling