Even before the coronavirus pandemic, the world appeared to be on the brink of a global recession. However, there’s no doubt that this trend has been accelerated by the virus, with experts predicting that the world’s total GDP will be at least 6.5% smaller by the end of 2020.
This issue is particularly prevalent in developed economies such as the UK, where it’s anticipated that more than £400 billion will be borrowed over the course of the next two years as public finances are decimated.
In this post, we’ll ask why innovation is crucial if businesses are able to survive this crisis, particularly in terms of cost management and sustainability.
1 Innovative Businesses Tend to be More Agile
Like most things that impact on the socio-economic climate, the coronavirus pandemic is a discerning master.
More specifically, it has created a scenario where brick-and-mortar entities have suffered extreme hardship and faced sustained periods of closure, while ecommerce ventures continue to experience accelerated growth as consumer behaviours continue to change.
In fact, it’s thought that Covid-19 will have added a staggering £5.3 billion to the UK’s ecommerce sector by the end of the year, with flexible and agile companies such as Amazon poised to benefit most.
Innovation is also a key driver of Amazon’s sustained and exponential growth, as this contributes to agility and an ability to react to sudden and unexpected economic changes. This is a significant lesson to heed, even if you have to innovate on a smaller scale according to your company budget.
2 Innovative Businesses are More Eco-friendly
There’s no doubt that businesses are becoming increasingly eco-friendly in the modern age, and there are several different reasons for this.
Firstly, it’s thought that the world will exhaust its existing source of fossil fuels by the year 2066, so it’s crucial that businesses look to adapt proactively ahead of this time.
Also, there’s no doubt that the world’s consumers are also increasingly inclined to protect the environment in their everyday lives, and partnering with sustainable and eco-friendly brands is a key part of this.
So, this should be a key focus of innovation within your brand, particularly in terms of the materials that you use and the way in which you look to reduce waste and energy consumption. This may require some form of business finance or loan, as you look to.
3 Innovative Businesses Often Benefit from Reduced Costs
If your business is able to reduce waste, this often translates into lower operational costs and higher levels of efficiency over time.
In this respect, constantly innovating and updating your commercial practices can lead to lower costs and optimised profit margins, while simultaneously contributing to an eco-friendly and ultimately ethical brand.
In most cases, this type of innovation leads to the streamlining of existing business processes, which helps to eliminate production (or administrative) bottlenecks and optimises employee productivity across the board.
Ultimately, an innovative mindset is one that constantly looks to change and improve processes, often to the financial and operational benefit of your business.