Paradigm shifts

New Normal aims to help you identify the key changes in the wider landscape that will impact you and your business.

Some of these changes are already becoming obvious, such as rising levels of debt and the threat of deflation due to lack of demand. Others are still to appear. These relate to the way behaviour is changing in response to the Covid pandemic in 5 key areas where major paradigm shifts are underway:

DEMAND PATTERNS

Demand patterns paradigm shift in global business

The lockdowns have broken down the inertia surrounding work and home-based routines. Travel, leisure, construction, real estate and other industries are already seeing major change as a result.

The EU’s Green Recovery deal is just one example of the new opportunities that are likely to develop. Europe, for example, is likely to see very rapid growth of Electric Vehicles at the expense of gasoline or diesel, and other regions will see similar challenges and opportunities emerge.

Companies and investors need to focus on demand rather than supply, by evolving from today’s product focus to a solution orientation.

RESHORING SUPPLY CHAINS

Reshoring supply chains paradigm shift in global business

Global supply chains have proved very fragile during the pandemic. They have collapsed not only because of the uncoordinated nature of the lockdowns around the world, but also due to volatility in demand patterns.

These problems are unlikely to quickly disappear, making it essential to closely monitor developments in all the major end-uses on a segment by segment basis, rather than assuming ‘one size fits all’.

In the food packaging market, for example, anyone selling into the restaurant business during the lockdowns saw volumes collapse, whereas those selling into retail supermarkets were overwhelmed with orders.

ENERGY ABUNDANCE

Energy abundance paradigm shift in global business

It already makes economic sense in some regions to ‘scrap and build’ – in terms of scrapping older, fossil fuel-based infrastructure, and replacing it with modern renewable-based power sources.

This confirms that ‘cost-advantaged feedstock’ is no longer a critical success factor when considering new investments, especially with BP forecasting $100/tonne carbon taxes by 2030.

It also highlights the problems faced by the US shale gas expansions down the chemical chain, and the wake-up call awaiting OPEC and others who believe that pivoting from transport to chemicals will somehow keep oil demand growing in the future.

CIRCULAR ECONOMY

Circular economy paradigm shift in global business

The need to reshore supply chains in a world of potential energy abundance suggests that moves towards a circular economy will accelerate.

Even without the pollution issue, it would make little sense for the world to continue spending $80bn-$120bn each year on producing single-use plastic products, which are then thrown away immediately after use.

The pandemic has confirmed that plastics are very valuable materials – but we need new locally-based business models to be created, covering the value chain from collection through processing, manufacturing (based potentially on 3D printing) and distribution.

Thinking ‘out of the box’ will likely create a goldmine for those innovative companies who focus on capturing the sweet spot in the new value chain, and rapidly scale the new business models across the main cities and towns in their chosen region.

ADVANCED MANUFACTURING

Advanced manufacturing paradigm shift in global business

Many manufacturing operations still operate as they would have done 500 years ago, or even 50 years ago. A visitor from Shakespeare’s time – or from after World War 2 – would feel quite at home if they visited many manufacturing sites today.

It makes no sense to reshore on the basis of centuries-old technology when digital, continuous & biotech-enabled technology is safer, greener, faster and cheaper.

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Turning off the tap for fossil carbon
Renewable Carbon for Chemicals and Derived Materials.

A New Normal Consulting synopsis of a report from the nova-Institute, April 2021.

New Normal Consulting White Paper 02 – Nova report – Renewable Carbon for Chemicals and Derived Materials