Economic Growth

Here's what a poll of global businesses reveals about the post-pandemic world

Greenpeace activists project a slogan that reads "No money for yesterday" on the Reichstag building, June 3, 2020.

No more business as usual: both corporate leaders and the public want to see real change Image: REUTERS/Fabrizio Bensch

Barry O'Byrne
Chief Executive Officer, Global Commercial Banking, HSBC
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  • HSBC’s most recent Navigator survey shows companies in step with a public clamouring for change.
  • Firms responded to the pandemic by pulling closer to customers, employees and suppliers.
  • Governments can help businesses make investments for a low-carbon, high-tech economy.

Global recessions are seismic events. They shift the tectonic plates on which economies stand, reshaping the commercial landscape as shockwaves upend businesses and livelihoods.

Leading a bank in Italy through the global financial crisis, I saw how recessions provide a litmus test of business resilience. Companies appear more prepared to meet that challenge today, in part because a healthier financial sector can better withstand severe economic loss.

As I work from my kitchen, it’s tempting to think that a return to the office will signal a return to business as usual. But my virtual conversations with clients reveal far wider ambitions. This chimes with public appetite for change.

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New research by HSBC’s Navigator surveyed over 2,600 companies around the world. It shows that post-pandemic business plans hold promise for the economic renewal the public seek. Firms are making fundamental changes to how they operate across three dimensions.

First, collaboration. Recognising their responsibility to society, one in three firms reacted to the pandemic quickly by adapting their products and services to support relief efforts. HSBC recently supported clients as they switched production to hand sanitiser, including UK craft beer-maker Brewdog and chemicals manufacturer Fluid Energy Group, which quickly became Canada’s largest producer.

Businesses are pulling through by pulling together. Despite physical distance, four in five businesses feel closer to their customers, employees and suppliers. And nine in ten provided direct support to businesses they work with. This collaboration, coupled with government support, ensured that more businesses survived the initial crisis than feared.

This strategic shift towards collaboration will not be short-lived. Navigator research shows that an overwhelming majority of businesses are seeking to become more collaborative, rather than going it alone.

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The economy is also being reshaped by the second aspect of business change: innovation. This is fundamental to raising long-term productivity and growth. The most resilient businesses are going beyond automation to cut costs and investing in technology to innovate.

The pandemic offered a glimpse of the future – from Zoom meetings to streaming entertainment and e-commerce deliveries. Our survey shows technology is now seen as vital for business continuity, with most firms moving online. This recognises changing consumer habits and signals a digital recovery.

When Beijing shops closed during the SARS outbreak 16 years ago, retailer Jingdong Century Trading moved online. Now known as e-commerce platform JD.com, they’ve utilised autonomous delivery robots and drones during this pandemic, enabling them to boost sales by over 20%.

The third dimension of business change bolsters hopes for accelerating the low-carbon transition. There is near-unanimous commitment among business leaders to rebuild on firmer environmental foundations. With 85% of businesses prioritising environmental sustainability, this creates long-term commercial opportunity.

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So, amid the greatest economic challenge in a generation, businesses are pivoting to become more collaborative, more innovative and more sustainable. Policy-makers’ initial aim of building an economic bridge between the pre-pandemic past and post-pandemic future is holding. Businesses have proven resilient. But bigger questions lie ahead about what kind of economy emerges.

Image: HSBC

Businesses’ emphasis on collaboration creates space for expanding partnerships between public, private and civic sectors to develop solutions. The private sector, for example, is supportive of government initiatives toward a green recovery. HSBC has called for economic stimulus to be invested in the transition to a low-carbon, net-zero-emissions economy.

Throughout this crisis banks have acted as the transmission channel for billions of dollars in liquidity support to people and businesses. The next step requires financing of the operational change companies are seeking.

Business decisions to hire staff and upgrade equipment will spur innovation and improve living standards. Yet short-termism can influence both financial markets and politics. And stretched balance sheets may further limit post-pandemic investment. Long-term thinking among policy-makers may offer a corrective.

There will be a huge requirement for patient capital to rebuild. This creates an opportunity for public investment to support a rebound. Governments and the financial sector should explore new ways of promoting investment, including blended finance, where risk is appropriately shared between the public and private sector.

Businesses around the world are forging a new path to emerge stronger from this crisis. But they cannot do so alone. Economic renewal depends on effective collaboration.

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