We often bang the drum of planning ahead at Mosaic International. Business planning is not uncommon – most businesses will have strategic plans based on short, medium and long-term scenarios, ensuring that not only a Plan A and Plan B are set, but now more than ever maybe even a Plan C as well – something for situations that arise out of the blue that are completely unexpected.
Whilst it is hard to predict a pandemic like Covid-19 sweeping across the globe, we are now all aware of the sheer scale of a worldwide disaster – how something completely out of our control can affect every single nation. Health and safety have been impacted, and as a knock on effect businesses and the economy are experiencing a lock-down like never before.
We have faced economic crises before. The 2008 global recession is still fresh in the mind of many business people and whilst the recovery from this took time, it was still there. A big factor in the global recovery from this recession was connectivity and trade.
The global connection
Global trade has been going on since the first farmers were able to move their produce from one village to another.
Today, we are better connected than ever. In fact, some may argue that global connectivity is the reason we are experiencing this global pandemic – how an obscure virus in China is able spread across the entire world leaving nowhere untouched.
But global problems require global solutions. Medical research in the fight against coronavirus is of a global effort, and once a vaccine is found it will require a global supply chain to deliver the badly needed vaccine to the population of the world. The same can be said for our economic recovery – if we all work together the recovery will be much quicker than if we isolate ourselves and act alone.
The crisis has already shown quite clearly how connected the world is for trade and supply, quite possibly something we take for granted. This has been highlighted recently with a ventilator manufacturer being unable to source vital parts due to problems with their supply chain in China.
We cannot insulate ourselves completely. No man is an island.
We mentioned having a Plan C, a plan for the unexpected. Whilst it may be hard to identify a problem before it even arises, what we can do is learn from past experiences. Maybe as a nation we could have predicted to some extent the impact Covid-19 would have on our day to day lives by paying more attention to what was happening in other countries.
The same also applies to business – we should always be looking at how external factors are affecting the macro economies we are part of. The latest figures from the World Trade Organisation (WTO) predicts merchandise trade volumes will fall by between 13% and 32% in 2020.
Robert Azevêdo, the Director General of the WTO comments: “When countries start preparing for the next pandemic, being able to source equipment and components across borders will help them build stockpiles more cost-effectively.”
Mr Azevêdo isn’t suggesting we stock pile household essentials like many people did at the start of the pandemic, but what he is suggesting is that whilst no-one wants to be going through a situation like this again, it would be foolish not to have a plan C in place should this prediction become a reality. It is also a wise business message because by learning from what has already happened, it can help us to plan more effectively for the future.
What can we learn from this?
Another drum we have been banging at Mosaic International as you will have seen from many of our previous blogs, is that the world always has been and always will be open for business. A lot of our advice to UK businesses is based around seeking new opportunities in other markets, whether it be for supply chain solutions to new business development opportunities.
Nothing has changed here. Yes, there will be a recovery period and logistically whilst the world is on lock-down things might take more time, but from a technological perspective we can reach every corner of the globe with ease.
The key is in the communication – once you have found a new opportunity, developing this into a long-term and profitable relationship for all parties requires a complete understanding of culture, ethics and objectives, which is where a consultancy like Mosaic International can add serious value.
There will undoubtedly be changes in the way we conduct our business, not just locally but also internationally. Foundations will need to be put in place to ensure the recovery is sustainable and socially inclusive by keeping international trading markets open and easy to access.
A recent article in the Guardian highlights the negative impact ofcreating a completely national supply chain would have on the economy, as the loss of specialisation that comes with having access to a global supply chain would significantly lower growth and productivity.
The global effort now is focused on easing international trade restrictions and tariffs to ensure production of urgently needed supplies, like PPE equipment and ventilators can be supplied in a timely and cost effective manner.
As we have recently seen with Brexit in the UK, there is going to be a shift to tariff free trading on a more global scale for British businesses who will soon be operating outside of EU rules and restrictions. The current global situation, where governments are releasing new Covid-19 related trade measures, is there to help everyone understand how global markets are going to evolve as a result.
Some key fundamentals have already come out of Brexit for UK business: our supply chains are becoming leaner and more responsive, we have flexible labour laws, and it is relatively easy to start up in business and access finance.
We will be in a strong position to kick-on once the coronavirus situation eases off. What we need to ensure in the meantime is that we do not stand still and just wait for opportunities to arise. We need to proactively seek them out, prepare for various outcomes and think globally. Free trade will get us through.
If you are using this unexpected down time to reassess your business operations and identify areas of opportunity, and you need some specialist advice on the potential of specific international markets we are only a phone call away.
No matter how far down the line you are, our expertise could prove the difference in ensuring a successful outcome. Why not run your ideas past us on 07885 874873 or email@example.com? It could be your most productive move of the lock-down.