entertainment, telemedicine, e-learning and food delivery soaring. This outpouring of
enthusiasm and ingenuity is impressive, but the hard truth is that a lot of it is
unsustainable.
In 2021 chief executives face a year of reckoning, as they deal with innovation fatigue
inside their firms and a complex business environment outside. An analysis for The
World in 2021 by superforecasters at Good Judgment, a forecasting firm, predicts that an
effective covid-19 vaccine will not be widely available during much of 2021. There are
also lots of conflicting views on how quickly the global economy will recover.
Bridgewater, the world’s biggest hedge fund, reckons the pandemic will cost companies
around $20trn globally.
If firms are to survive the difficult year ahead, the executive mindset must shift from
innovation to transformation. In particular, bosses must address three geographic
dilemmas for which there are no easy answers.
First, where should firms make their products? Companies find themselves on the front
line of political fights over tariffs, technology, climate change and racial injustice. In part,
this reflects a failure of leadership from politicians, which has prompted consumers and
employees to demand that bosses step up instead. It also reflects the fact that firms are
now pawns in wider geopolitical battles—just ask Huawei, TikTok, Harley-Davidson,
America’s tech giants or the French wine industry, all of which have been caught up in
trade, tax and technology spats beween America, China and Europe.
In this fast-changing and uncertain regulatory landscape, deglobalisation seems an
obvious response. But Kevin Sneader, global managing partner at McKinsey, a
consultancy, challenges the notion that supply-chain efficiency must be traded off
against resilience, arguing that “over time these ‘resilience costs’ could be innovated
away” by new ways of doing things. That will require bosses and company boards to
make hard decisions about how to modify their global supply chains to make them
shorter, faster, smarter and safer.
The second geographic quandary is: where will customers want to buy things? The rise
in e-commerce during the crisis has clearly boosted online retailers like Amazon but
there may be other, more surprising beneficiaries too. Mauro Guillén of the Wharton
School predicts that companies like Canada’s Shopify, which serves as the online back-
end for smaller businesses, will enable sustainable e-commerce “within 25 miles of your
home, which didn’t exist before”. In America and Britain, which have strong digital
infrastructure but underdeveloped e-commerce when compared with China, the shift
towards online shopping could prove permanent.
But the picture varies greatly by industry and market. Although 60% of Italians shopped
online during the pandemic, only 10% found it satisfying. In many parts of continental
Europe, which have poorer infrastructure for delivery and online engagement, some
consumers will revert to in-person purchasing after the pandemic.
The trickiest question is: where should employees work? Remote working, forced on
firms by the pandemic, has proved popular. Jonas Prising, the boss of Manpower, a
human-resources consultancy, says his clients report high worker satisfaction and