For those of you who follow the eMerge blog closely, you’re in for something different. Normally, our blog focuses solely on NetSuite and related solutions. However, these are not normal times.
The status quo of the global economic system has been turned on its head, and even as we recover, I believe not everything will go back to how it was. Lessons will be learned, experimental technologies tested, and businesses will find out what can be trusted and what can not.
Here are my predictions for what will happen in a post-COVID-19 global economy.
China will no longer be known as the world’s factory! Even before COVID-19 locked down economies around the world, the supply-chain impact from Chinese factories grinding to a halt, sent shockwaves throughout the global economy. Many manufacturers were suddenly short on raw materials to make their products, and some retailers no longer had any product to put on the shelves at all.
Recent data shows that China accounts for over 1/4th of the worlds manufacturing power. I predict we will see that number shrink dramatically in the next few years.
I hope to see this decentralization specifically in the medical device industry, as perhaps scariest of all, medical equipment that is vital to saving lives during this health crisis is in short supply at the worst possible time. Factories across America are currently scrambling to make the masks, ventilators, and face shields, our first responders and hospital workers depend on. However, for many, I fear these efforts will not come soon enough.
I predict companies who have been burned by Chinese sources will look for other vendors even if the costs are greater. I expect some of the manufacturing to return to the U.S., but I also see countries like Mexico, India, South Korea, and Germany stepping up and capturing an even greater share of the manufacturing market.
Cloud Technology Goes Mainstream
Pause for a second and reflect on how much worse this situation would be without internet and cloud-based technology.
Cloud-based technology is the reason why many colleges and educational institutions are still operational, why many people are still able to work, how doctors can still communicate with patients, and how families are staying connected.
For many businesses, collaboration software like Zoom, Go-to-Meeting, Slack, and Teamwork, along with cloud-based systems of record like NetSuite, Salesforce, and Workday have allowed many businesses to make a relatively seamless transition to a shelter-in-place work life.
COVID-19 can be considered a proving ground for many of these solutions. Businesses who used to appreciate the convenience and flexibility of cloud solutions are now forced to use them for their very survival. The holdouts who remain committed to on-premise are watching in horror as their competitors are able to keep the lights on while they’re forced to shut down. Once we come out of the other side of this disaster, I imagine the remaining hold outs will give in, and the businesses who have been forced to survive off of cloud convenience will double down on proven results!
Fun fact about Zoom, according to market data as of 4/7/20, Zoom Video Communications Inc is currently worth more than the top 3 American airlines combined! This explosion in value just underpins my point. We will see a much more significant investment in tech coming out of this disaster even though technology was already of the hottest industries coming into 2020.
Automation Becomes Even More Popular
Robotics, AI, IPaaS, and any other technology that contributes to automation will also see added emphasis when we return to normal. Many businesses are currently struggling under lockdowns and demand shock, so the economic reality we return to will be one that stresses savings and efficiency. And one of the best ways to save costs is to automate processes that otherwise would be done with employee labor. As businesses are forced to lay off employees, they will look for ways that they can replace that production without adding to payroll.
Manufacturing will indeed come back to America, but I don’t think it will bring jobs back home with it. Instead, businesses will invest in robotics to save costs in the long run. Robots can’t get sick, don’t have off-days, always show up to work on-time, don’t require benefits, and will never ask for a raise. There were already plenty of reasons to invest in robotic production, and I imagine COVID-19 will be the catalyst that finally pushes manufacturers over the edge.
Automation technology was already on the horizon before COVID-19, I predict we will see businesses jump on the bandwagon even faster once all the dust is settled.
This Was Fun..
Making these predictions was a fun thought experiment, and maybe you’ll enjoy it too! Let me know your predictions for a post-COVID-19 economy in the comments below, and feel free to tell me what you think of mine! You may just find some solace in contemplating a world where we’re past shelter-in-place, lockdowns, and social distancing!
From everyone at eMerge Technologies, stay safe!
Jeremy McCourt is an content producer in the enterprise software industry that focuses on NetSuite and related cloud-based software solutions.
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