Ipsos predicts trend reshoring supply chains
The pandemic is expected to change the business landscape by driving the gig economy, reshaping the distribution of the workforce and reshoring supply chains, says Ipsos, a global market research firm.
The outbreak is projected to increasingly erode mid-level jobs, reduce formal qualifications in the workforce and force businesses to ensure a more equitable society. These six trends are expected to gather momentum following the outbreak, said Ipsos.
“Social distancing and the shutdown should intensify new behaviours and the adoption of trends in only 2-3 years, instead of the 10 years usually needed for a trend,” said Aitsanart Wuthithanakul, senior client officer at Ipsos.
He said the outbreak is encouraging remote work and higher consumption of digital media. It could also trigger the realignment of international trade.
“In Thailand, we think online shopping, online streaming, digital media consumption, online fitness classes and online classrooms will emerge after the pandemic subsides,” said Mr Aitsanart.
The pandemic is pushing governments, businesses and consumers to experiment with new methods they would otherwise not consider because of organisational or ideological inertia.
Driving these new methods are technological advancements in capability and capacity made in the past decade, he said.
According to Ipsos, the first of the six trends companies would consider is reshoring their supply chains.
Corporations will reassess the resilience of their supply chains after the outbreak and see alternatives in shortening supply chains and reshoring, especially as production cost differentials between higher income and lower income countries narrow due to technological advancements, said Mr Aitsanart.
Companies will pay more attention to domestic supply chains and declining exports from developing countries, he said.
Mr Aitsanart expects trade tensions to rise as governments scrutinise global supply chains as a matter of national interest and seek to exert some national control over essential or strategic supply chains.
Second, a distributed workforce will be considered. More employees will work remotely, decreasing the office size.
Third, work will be increasingly measured in terms of the number of tasks completed rather than time spent, as conventional time-based employment will be difficult to monitor in remote work arrangements, he said.
“This will lead to employment contracts shifting towards task-based compensation,” said Mr Aitsanart. “The gig economy, comprised of temporary, flexible jobs will be commonplace, and companies will trend towards hiring independent contractors and freelancers instead of fulltime employees.”
Fourth, mid-level jobs should increasingly dissipate as digital adoption results in structural changes in businesses, leading to many routine administrative and mid-level management jobs becoming obsolete.
Fifth, the importance of formal qualifications will decline as employers increasingly hire talent with a short or mid-term outlook, he said.
Lastly, customers will expect companies and the government to play a bigger role in ensuring a more equitable society.