After a most turbulent year as a result of the pandemic and as welcoming as the vaccine roll out certainly is, businesses need to brace themselves for a transforming spillover before we can truly talk of a rebound, or, even more so, of an economic recovery.

The government’s responsiveness to change has been forthcoming and there is stronger collaboration among the social partners.

Yet, despite the far-reaching support, the government remains under pressure for a continued helping hand in the midst of the prevailing uncertainty. Undoubtedly, balancing health priorities with economic and fiscal policies will always remain a very delicate act to perform.

The government and businesses alike are having to manage dual health and economic crises.

This is certainly not a matter of deciding whether to save the people before the economy as opposed to saving the economy before the people because, to varying degrees, they are both interdependent, yet, what is certain is that it is difficult to achieve both at the same time.

The prevailing outlook is most likely to result in a scenario where public debt to GDP ratio will increase substantially. However, the key challenge is not the debt per se but more the policies adopted to manage and sustain the economy from growing out of any possible debt distress.

Policy measures do not work like a vaccine. They may stimulate more economic activity and productive investment, making businesses stronger and more resilient, but they will not render such businesses immune.

There is no immunity from the economic repercussions of the seismic changes brought about by this pandemic.

With many businesses and economies adversely affected, we are likely to experience a degree of rising unemployment along with underemployment, a fragile and smaller tourism and hospitality industry and a generally weaker economic and commercial climate for some time until a greater sense of normality is restored.

The key challenge is not the debt per se but more the policies adopted to manage and sustain the economy from growing out of any possible debt distress- Norman Aquilina

These potential developments are having businesses wondering how to prepare for what may lie ahead, even if one must acknowledge that many businesses have innovated and adapted to the ra­pid­ly changing circumstances.

The negative effects of the pandemic are well known but every cloud has a silver lining. It is helping transform key areas of the economy, which are most likely to translate into changes in the nature of certain jobs along with related policy reforms. This transformation will also ensure that inefficient systems and businesses are weeded out and new contenders emerge.

Of significance is the reliance on digital connectivity as businesses move towards a more digital economy. In fact, technological drivers have accelerated and disrupted the business landscape, with the pandemic having precipitated unheralded social and work interactions practically overnight. Indeed, e-commerce, virtual conferencing and streaming are all undergoing unprecedented growth.

This transformation will go further. An economic downturn often leads to crea­tive opportunities, helping us take a leap forward towards more equitable and sustainable development, compelling us to reconsider our relationship with the environment and nature in gene­ral, emphasising the need for a greener and more resilient economy built on sustainable growth.

When experiencing challenging times and accelera­ted changes in a heavily subdued but, nonetheless, competitive environment, businesses are forced to brace themselves and endure the pressure, taking corrective measures to mitigate the impact and ensure they stay within the pack.

It is within this context that this pandemic has brought on an opportunity for businesses to undertake a reality check on their state of affairs, along with any required root and branch transformation.

To think or expect that we will just carry on from where we left off before this pandemic broke out would be naïve and a mistake, even if the expectations towards ‘normality’ as a result of our ongoing nationwide vaccination are now understandably there.

Clearly, the challenge is not over yet and the coming months will be crucial in determining the long-term implications of the pandemic.

The impact has been signi­ficant on most businesses and going forward will certainly result in lasting changes in how many businesses are structured and how they operate.

In the light of a general economic downturn, it remains critical for businesses to continue to focus on restructuring their business models.

Businesses will need to continue to innovate and transform the way they operate, always with a view to further strengthening their competitive advantages whilst addressing any shortcomings.

While the business landscape has become much more precarious due to protracted uncertainty, this pandemic has exposed the complacency and vulnerability of a number of businesses.

Here, some will need to, if not be compelled to, consider consolidations and creative partnerships. This could be by means of divesting, mer­ging or acquiring businesses to move out or strategically reposition and strengthen their market positioning.

The market remains excessively fragmented and ill-structured in many areas, giving rise to some opportunities. Therefore, one can here anticipate some developments within the foreseeable future.

Moving ahead, the outlook needs to be that of continued caution as businesses must be ready for a disorderly shakeout during this volatile period.

Whatever the extent and market reach of this transforming spillover, it is most likely to give rise to an element of differentiation and, possibly, even diversification among many businesses.

Therefore, businesses need to remain constantly vigilant to be able to exploit the opportunities, while also being better placed to address the challenges of today but, more so, of tomorrow.

Norman Aquilina is group CEO, Simonds Farsons Cisk plc.