B of A Securities. Global Banking & Markets did an interesting piece looking at a few megatrends that are worth pondering a little deeper. The author, Haim Israel of B of A, notes that the "coronavirus is not just a temporary crisis, it’s a permanent disruptor. It’s one of those rare events in history that will completely reshape geopolitics, societies and markets.” My personal belief is that he is likely not that far off and more than likely we will see others joining him in his circle. Many of these trends, according to the author will affect "everything from geopolitics to healthcare to technology." And in some cases, the author notes, "the virus has sped up trends that were already underway, but might have taken five years or more to unfold without the pandemic." We are seeing some tectonic shifts. That's some pondering.
Allow me to paraphrase the Big Five shifts.
1. Geopolitics and Globalization
Enduring, if not rising tensions between the U.S. and China are very likely to impact our supply chain and we may see a shift away from globalization towards localization. While these were already underway before the coronavirus, we are likely to witness a much faster-shift in manufacturing away from China.”
2. Tech Wars
According to the author, "The battle for technology supremacy between the U.S. and China will likely intensify." He sees this the real need "for tracking data to avert future health crises" will be far greater than ever. “The lasting legacy of this will be a combination of new communication infrastructure, data generation, cloud computing power, and bandwidth."
3. Big Government
If Big Government was ever waiting for an excuse to expand into our lives, then the coronavirus was, for some, a veritable gift from Heaven and it "allowed for a newly expanded social mandate to protect their citizens." Looking ahead is not that pretty. According to the author, "expect greater government surveillance aimed at stemming future outbreaks, and new debates over the greater social good versus individual privacy". Governments will likely have a role to play in influencing businesses "focused primarily on shareholder returns to improve worker benefits and serve the needs of other stakeholders—including a greater emphasis on solving climate change and other environmental challenges." If you've read the tea leaves correctly, all of this should not come as a surprise
4. A Greater Focus on Health
The author states that "coronavirus will amplify the importance of healthcare and the critical role it plays in national security and economic growth." He believes the debate around universal healthcare is likely to intensify in the U.S. Globally, look for health systems that reduce waste and emphasize value-based outcomes, preventive care and technology.
5. The New Consumer
Gen Z is a clear winner in all of this. They are uniquely prepared for a new era of social distancing. "As the first generation of digital natives, these younger consumers are comfortable in a world that takes place largely online." Other generations have adopted their digital ways during the lockdown, however the author notes, "many of these new habits are likely to stick, which has implications for business strategies going forward."
https://www.bofaml.com/en-us/content/5-themes-to-expect-post-covid-19.html
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