If 2020 was bad for Businesses, How Will 2021 Be? Extrapolating the Present Trends

As the Clock Ticks down on 2020, It is Time to Look Ahead to 2021 and How it Would Be

It goes without saying that 2020 has been an especially bad year for the global economy and by extension, for businesses.

What with the Covid 19 Pandemic wreaking havoc worldwide forcing entire nations to lockdown and to make businesses suspend their operations and leaving them in limbo due to the uncertainties even after the lockdowns were lifted, there could not have been a worse year in living memory.

Indeed, 2020 is a year that all of us, citizens, consumers, and stakeholders in businesses are unlikely to forget in a hurry.

So, what will 2021 be like for the economy and for businesses? Will it be as bad as 2020 or god forbid, worse?

Moreover, can be extrapolate the present trends to forecast about the coming year?

It is often the case that the Year End brings forth many to look behind at the year that is coming to an end and to look ahead based on what they think would characterize and happen in the year to come.

This article is one such prognostication on the year ahead based on the available trends shaping the future.

Vaccines, Herd Immunity, and Getting Used to Uncertainty Make us Cautiously Optimistic

To start with, there are some bits of promising news on the economy front. The first of these relates to the Rolling out of Vaccines that are now being administered in many countries worldwide.

So, if we begin to vaccinate the people, will the continuous cycle of lockdowns and Stay At Home orders cease and we can get our businesses up and running and our economies on track?

At first glance, this seems possible, though it might take at least another Six Months before we can return to some sort of Business As Usual.

Moreover, with the Mutations of the Virus now being detected in the United Kingdom and elsewhere, there are further layers of uncertainty here.

Having said that, one can be cautiously optimistic since Herd Immunity is more or less being achieved in many Asian countries, especially India, and once this reaches a critical mass, businesses can work uninterrupted due to labour shortages.

Therefore, it is the case that midway or earlier into 2021; the global economy would start to chug along from the temporary pit stop at which it has been halted.

In addition, governments worldwide now have SOPs or Standard Operating Procedures to deal with businesses.

The Presidential Election, the Brexit Deal, and China’s Preeminent Role in Recovery

Another trend that is noticeable is that the 2020 Presidential Election in the United States has ended with a clear winner and with Joe Biden all set to take charge, there is an air of anticipating and expectation.

Though the Democrats are usually less Pro Business than the Republicans, it goes without saying that Biden would govern on a Centrist Platform and hence, can be expected to be sympathetic to businesses.

In addition, the Brexit Deal has been done removing another layer of uncertainty and with Europe too recovering slowly; one can expect momentum from these two events to provide tailwinds to global and domestic businesses.

Perhaps the most important trend is that China is more or less on the Road to Recovery and as it has now replaced the United States as the Engine of the Global Economy, we can see a Rapid Return to Normal in some parts of Asia.

Moreover, Biden is not expected to be as belligerent on China as Trump was and hence, there would be less friction as far as trade between the Two Superpowers is concerned. In addition, most global businesses by now have learnt to live with the disrupted global supply chains.

Healing from the Trauma Takes Time and Hold Off On Singing Kumbaya This New Year

Having said that, 2021 can yet shock and surprise us and the main Black Swan or the unpredictable trends would be in so far as containing the fear as well as the real threat of contagion are concerned.

Indeed, even if Intercontinental Travel resumes at full throttle, it is unlikely to reassure Jittery Global Citizens that it is safe to travel and hence, the key thing to watch out for in 2021 is the Post Traumatic Stress Syndrome and the Atmosphere of Fear that are hanging over the businesses as Swords of Damocles.

In other words, as the Global Economy was paralyzed in 2020 leading to a traumatic experience for all, it remains to be seen as to how fast we can heal and get back on our feet leading to a global economic rebound.

Moreover, most large and medium businesses plan years ahead and with the prevailing uncertainty, one cannot really expect them to start singing Kumbaya like it was the Good Old Days.

So, some sort of disruption and cautious steps are to be expected delaying the recovery or at best, leading to a Tepid Growth Scenario. With consumers hoarding cash rather than spending, normal might be far.

Conclusion

Last, it is undeniable that the Covid 19 Pandemic was a crisis that was never before experienced and equal in scale to the World Wars that disrupted the world in the last century.

Therefore, expecting Miracles and a Return to Growth might be Pipedreams and hence, the best we can hope for in 2021 would be at least some semblance of Normal or the New Normal, as some experts are phrasing it.

To conclude, businesses would certainly be advised to temper their New Year Celebrations given the trends discussed here, though, a Cautious Optimism can be understood and be acceptable.


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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


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