3 years ago

Opportunity Issue 93 - March 2020

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  • Economic
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ED’S NOTE Adapt or die

ED’S NOTE Adapt or die As South Africa begins to grapple with the implications of COVID-19, a lot of businesses are taking a great deal of pain. Particularly hard hit have been the travel, tourism and hospitality industries, especially those located in regions like the Western Cape which traditionally receive visitors from China and Western Europe. The ripple effect is also being felt as companies begin to invoke force majeure and smaller businesses find their supply contracts drying up. Of course, the stock markets are a bloodbath, with the JSE posting its worst results in 20 years. Gregory Penfold What lessons are there to be learned? Apart from opportunistic price-gouging by toilet paper hoarders, it is difficult to see where the opportunity in this catastrophe lies. However, there are signs that companies are adapting to this black swan event in ways that may influence the business environment in future. Apple, for instance, has announced that rather than postpone or cancel its Worldwide Developer Conference (WWDC), the show will go on online, providing an opportunity for millions of creative and innovative developers to get early access to the future of iOS, iPadOS, macOS, watchOS and tvOS, and engage with Apple engineers. Closer to home, the National Festival of the Arts has also taken the historical decision to go virtual. “Going virtual will mean that the festival can continue to support artists and the arts in 2020, by presenting work within a digital space. This way we can share some magic and hope with those who may still be confined to their homes. An opportunity to connect when we are being asked to distance ourselves from one another,” said the festival in a statement. "Rather than cancel, we aim to create a new opportunity for artists and audiences alike to celebrate the arts, and to create an accessible platform for artists to share their work. For Makhanda and the Eastern Cape, this is going to be a really hard year and we are fully aware of the enormous impact that COVID-19 will have on our economic stability. We know how much income our festivals contribute to the infrastructure and economy of Makhanda. We remain committed to the city and will continue to play our role as good corporate citizens." Even for manufacturers, the disruption contains a sliver of a silver lining. As Sujeet Morar, Principal at Kearney, states, “Now is not the time for manufacturers to panic. The outbreak provides an opportunity for business owners to improve their business strategies and inoculate their companies against COVID-19.” According to Morar, the impact of the COVID-19 outbreak is being exacerbated by three supply chain trends: • The climate crisis and widespread environmental degradation profoundly impact global supply chains through increasing risks to available resources. • Trade tensions increase uncertainty by disrupting supply chains and creating opportunities for local suppliers. • Emerging technologies are reducing the importance of economies of scale, facilitating the location of production closer to consumers, and enhancing transparency between producers and consumers. Now is the time to address these issues too.

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