With the first peak of the coronavirus pandemic behind us, both companies and policy makers are looking to the future while working on the economic relaunch. Conscious of the need for an in-depth understanding of the resulting challenges and opportunities Luxinnovation has produced a report that provides a unique overview of the innovation, technologies and trends that will shape the economic reality in the months and years to come.
Mapping the main market trends
The study “Post COVID-19 Market Trends” is based on information from three sources:
- National recovery strategies that have already been published by European countries, as well as the European Commission’s recovery plan and position papers issued by international organisations such as the OECD and the World Economic Forum
- Technology and innovation market studies taking into account the impact of the COVID-19 crisis
- Articles published by specialised press on topics related to current market trends in the post COVID-19 period
“A huge number of articles and publications have been released on after-crisis trends, but each generally focuses on one single subject or technology,” comments Sara Bouchon, Head of Market Intelligence at Luxinnovation and one of the authors of the report. “We have tried to provide a coherent overview of the most specified trends and ideas in a structured manner.”
Four megatrends
The market intelligence team has grouped the key tendencies identified into four megatrends that will impact the economic recovery: digitalisation, sustainability, resilience and new business strategies.
“Even though the crisis brought some parts of the economy to a near standstill during the lockdown, it has strongly accelerated some trends, such as digitalisation,” says Dr Bouchon. “A large proportion of the workforce had to switch to remote working with almost no advance notice, for example, and many shops had to very rapidly start selling their products online.” Digitalisation also turned out to be a success factor for some industrial companies with a high level of automation, which allowed them to continue producing even when the staff could not be present on site. “This will speed up the development of the factories of the future that are based on Industry 4.0 principles.”
Building a sustainable, resilient future
The huge impact of the current health crisis has raised people’s awareness of the potential consequences of a future climate-related crisis. Many governments have recognised the need for a sustainable recovery and the opportunity to “build back better”, to use the words of the OECD. “Recovery plans will include dimensions such as achieving the transition to renewable energy, shifting to a circular economy and rethinking food value chains to make them more local and environmentally friendly,” Dr Bouchon points out. “There is also a will to invest in sustainable infrastructure.”
The ability to absorb and adapt to external shocks is vital, for countries as well as for companies and individuals.
While the importance of sustainability was already generally recognised, the coronavirus crisis has brought the concept of resilience into the limelight. “The ability to absorb and adapt to external shocks is vital, for countries as well as for companies and individuals. This crisis has highlighted vulnerabilities in the way our society functions of which we were not aware. It is essential that we work on lessons learnt and define what we can do to become more resilient. A main focus in obviously on the healthcare system that is some places has been pushed to the very limits of its capacities. Other key issues include the building of regional supply chains, the development of new skills that help the labour force be flexible and agile, and ways to stimulate an inclusive democracy.”
Rethinking business strategies
While businesses are now dealing with the severe short-term impacts of the crisis, many of them will have to reconsider their strategies in the post-crisis period, taking into account the “new normal” situation. Some companies that adapted their production in order to respond to the urgent needs for disinfectants, face masks and visors, for example, are considering whether to stay in those markets or not. Others, who changed their business model to offer online shopping or home deliveries, ask themselves the same questions.
COVID-19 has been a strong driver of new forms of business innovation.
“COVID-19 has been a strong driver of new forms of business innovation,” says Dr Bouchon. “New partnerships have been formed that would not have happened otherwise, and we can see much more of open innovation. This, in turn, challenges the current regulations of intellectual property as many innovations stem from cooperations involving several organisations.” The health crisis has created new consumption and working habits, new needs to ensure that sanitary measures are being respected in offices, shops and other public areas, and new demands for entertainment in a context where large gatherings and face-to-face contacts are difficult. “These are some of the areas in which we expect to see a lot of innovation in the near future.”
Optimising Luxinnovation’s post-crisis services
The “Post COVID-19 Market Trends” study will be used by Luxinnovation as inspiration for enhancing its services to companies in the coming months. “These trends will impact almost all companies in one way or another,” Dr Bouchon points out. Having an in-depth understanding of long-term developments is crucial for the agency to be able to better understand companies’ needs and provide relevant advice and associated initiatives during the economic relaunch.