From an Australian Perspective - An upbeat view on the pathway back to the future
We all need to look for hope, so how do we find it when we are constantly bombarded with negativity and anger? To move forward we need to look both back in history and to the future both as a business and an individual, these are times of change. After the Spanish flu, there was somewhat of an economic bounce back. I think that this will happen in NZ and Australia but with some twists.
In Australia, the Financial Review reported “Household savings are expected to hit at least $200 billion this year, with $25 billion added in July alone as lockdowns in Australia’s two largest cities kept people indoors and spending less” I suspect that the same is for NZ. This money will re-enter the economy. Sydney Restaurants reopened mid October and many are reporting they are booked through to Christmas.
My thoughts based on a rebound are:
- Businesses may continue to exist on paper but cease to trade - immigration is on hold so staff are in short supply – some poor performing businesses will close their trading but not liquidate their entity. The job market will likely absorb the staff (and owners). There has never been a better time to get a job because… Staff are in short supply. Coding/IT, hospitality and seasonal workers are already in short supply but a key issue for NZ is to lift economic performance to keep high-value skills in NZ. I don’t think that unemployment will rise significantly. For New Zealand, employers need to make sure they keep staff as Australian companies are already aggressively recruiting in NZ.
- For various reasons, some people will retire out of the economy when borders open – they will have ‘had enough'. We have already seen this in healthcare, but like moving to the beach when people have time on their hands so they start planning.
- In Australia online shopping has doubled - this has created new jobs in online business, logistics, transport and delivery. Australia Post has also taken the opportunity to cut costs (we get mail delivered 5 days a fortnight now) etc. Companies that are not online are not likely to survive.
- IT software and hardware has been upgraded - A bit like the 2000 virus, almost all businesses have invested in technology, so they have the potential to offer more online services, and keep working through disruptions. Businesses that have failed to keep up with technology are somewhat blessed in that the cost of upgrades has decreased almost every year as software and hardware process have fallen relatively. What once required a proprietary system can be replaced with off the shelf products.
- Business agility has increased – who needs to have all the staff traipse into the office anymore? Products have been launched, staff have been recruited and all without the expense in time and costs of offices. Smart businesses will embrace this. I was talking to a CEO the other day who said that a project that once took a year or more they now allow 5 months to complete.
- New businesses have been launched but the scale of the change may not be noticed for some time.
Some people have time on their hands and make changes while others are wringing their hands. Recessions and depressions have all resulted in new activity e.g. Hewlett-Packard (1937-1938 Recession), Hyatt Hotels (1957-1958 Recession), Microsoft (1973-1975 Recession), Mailchimp (2001 & 2009 Recession) and Uber (2007-2009 Recession).
Now is the time to scan your environment and start making calls and investing for the future. Look for the opportunities as they are out there.
Brian Freestone