The term “new normal” has been coming up regularly during the last several decades and it is easy to see why: During the 21th century, the global economy has already experienced the financial crisis of 2007 – 2008, the subsequent recession and the latest addition to this list – the COVID-19 pandemic, the economical aftermath of which can easily rival the Great Recession.
The “new normal” indicates a need for a new mindset to respond to new challenges with both short-term and long-term actions in order to achieve future growth.
In the midst of a crisis, it is tempting to label any major disruption as a complete and imperishable change in the “normal” way of business and life. However, at least in the way business is done, the “new normal” may be not so far away from the old normal.
At least in the way business is done, the “new normal” may be not so far away from the old normal.
The COVID-19 pandemic has not changed the rules of the game entirely. It does not mean that there will not be accelerated innovation and new business models, as well as new products and services after the pandemic is over; most business will likely be able to operate as usual with a few strategic twists and some essential precautions.
So, in many cases, the adjustments made to the old business models will be quite small. This adaptation process is already happening, and many changes have already been made, at least as temporary measures.
In particular, these changes have sped up the transition to remote work and contact-free business models (e.g., in Italy, e-commerce transactions rose by 81 per cent in March, boosting customer engagement as well as new essential safety practices). These changes, however, include not only health precautions but also digital safety, like safe data storage, authentication methods and being cautious about phishing scams.
The United Arab Emirates have already had a very good starting position to emerge from this crisis quickly and strengthened, thereby playing out a competitive advantage over other countries. The United Arab Emirates continue to rely on modern, efficient administration in order to attract international investors with attractive structures.
In addition to attractive framework conditions, tax exemption is one of the main reasons why entrepreneurs settle in the UAE
In addition to attractive framework conditions, tax exemption is one of the main reasons why entrepreneurs settle in the UAE. With targeted incentives, location marketing, legal certainty and a service-oriented, unbureaucratic administration, the UAE continue to be among the world's topmost attractive jurisdictions for entrepreneurs.
Video conferencing and home office also show the enormous importance of a fast IT infrastructure and access to modern communication channels, because one consequence of the “new normal” will be that companies will increasingly rely on these new technologies in the future.
The provision of large offices and a fully equipped workspace is associated with high costs for entrepreneurs, so in the future the trend could move towards workplace sharing and entrepreneurs increasingly focusing on home office work.
Entrepreneurs should also be cautious about potential effects of the pandemic that may be not so evident at first sight. One of such effects is the increase of government involvement. Many European and American governments have deployed gigantic monetary stimulus packages, worth trillions of dollars. This means their roles in global and local economies have grown exponentially, possible resulting in greater and more careful scrutiny of businesses.
Entrepreneurs should also be cautious about potential effects of the pandemic that may be not so evident at first sight.
Microsoft CEO Satya Nadella stated: “As COVID-19 impacts every aspect of our work and life, we have seen two years' worth of digital transformation in two months.” Because necessity is often the mother of invention, some consequences of the pandemic crisis can turn out to be quite positive.
Households, businesses and governments have created new business models and have learned new ways to connect – this is what entrepreneurs can and should take advantage of.
- Count Oliver of Wurmbrand-Stuppach is the founder of GWS Group, which is an international tax advisory, corporate service provider and leading trust company with offices in the UAE & Europe.