As we enter the third (and hopefully final) year of the pandemic, businesses will rise and fall depending on the extent to which the world returns to life as it was before Covid-19 and the extent to which life has changed fundamentally.
The pharmaceutical industry is making billions from the vaccines it has developed to combat Covid-19. As the virus has mutated, these vaccines have lost efficacy, yet have continued to protect against severe disease and death. Will the majority of the population need to continue to be protected by vaccinations and boosters if the virus, as the Omicron variant is indicating, evolves to become as mild as a common cold? Be wary of the industry overplaying the need for vaccines in this scenario, when most people will get protection from natural immunity. On the positive side, the strides made in developing the vaccines have opened the way for vaccines against diseases we have not yet conquered.
The August 2021 report on climate change by the Intergovernmental Panel on Climate Change and the ensuing COP26 conference in Scotland in November have re-emphasised the need for action against global warming. This heightened awareness is driving investment away from fossil-fuel energy sources and into more environmentally-friendly, renewable alternatives such as solar and wind power. Battery technology is vital to the successful transition away from carbon, because these alternatives need reliable, large-scale electricity storage to be commercially viable. And who knows, we may be close to a break-through in the quest for nuclear fusion?
As the world emerges from the pandemic, the travel and hospitality sectors will recover from the extreme disruption of their business. However the recovery will be slow – people will be cautious to start travelling again, especially on long-haul flights. And will they want to spend their holidays on crowded ocean liners or in busy 300-room hotels? New patterns of travel are likely to become entrenched, with people opting to take their holidays closer to home and at more secluded destinations. Savvy tour operators, travel agents, hoteliers and restaurateurs will exploit the opportunities offered by these trends.
Advances made over the past decade will continue to shape our world and disrupt traditional ways of doing things. In finance, blockchain-based applications will carry on eliminating middle-men such as banks and payment clearance houses, giving the consumer greater control over transactions. The term “DeFi” (decentralised finance) will gain popularity as the trend progresses. Non-fungible tokens (NFTs) – blockchain-based, non-replicable digital creations – are likely to become more accepted an alternative asset class. And the Metaverse? Don’t expect too much in 2022, but there’ll be much work done behind the scenes in laying the foundations for this alternative reality.
Commercial property has suffered during the pandemic while residential property has boomed. Expect this trend to accelerate if employers remain comfortable with staff working from home. Wall Street Journal columnist Peggy Noonan says the pandemic brought about “the collapse of the commuter model … the owners of great businesses found how much can be done remotely. They hadn’t known that! People think it will all snap back when the pandemic is fully over but no, a human habit broke; a new way of operating has begun.” Will city business districts become redundant? Many people who are able to work from home are moving out of cities. Expect a rise in property prices in attractive rural areas.
This article appears in the January 2022 edition of our free digital magazine, IOL MONEY, which you can access here.