The coronavirus has swept across the world with devastating speed, leaving behind consequences that will take years to reverse. However, neither all countries nor all sectors will recover at the same pace. Gregor Pilgram, CEO of Generali Austria, gives his view on post-pandemic recovery in the region.
Author: Maja Dragović
Like in other European markets, the short-term challenge for many companies in the region will be to restart the business after the government aid stops immediately after the crisis. A lot of reserves from the past were used up to cover the shutdown periods and in the coming years, companies will have to adopt to a relatively long period of economic recovery. A mid-term challenge for the companies will be to adapt to the accelerated change in the customer behaviour towards modern technologies that happened during the pandemic, he adds. Hence, the essential part of the future business success will be the right repositioning of the business models to the new reality, Pilgram concludes.
“I expect a short-term increase in bankruptcies, especially in some sectors, which will put additional pressure on the whole economy”
– Gregor Pilgram, CEO of Generali Austria
Recovering after a pandemic
“In reality, nobody really knows how the markets will evolve and how long the recovery of the economies will take”
So, recovery in the region certainly won’t be easy or quick. The whole of tourism, gastronomy, the service industry, as well as small and medium enterprises in general, will face quite challenging times in the coming period. “In reality, nobody really knows how the markets will evolve and how long the recovery of the economies will take. The challenge will be to ensure the long-term flexibility of the business models, combined with a proper financial strength of the companies”, says Pilgram, suggesting that the focus of the countries in the region should be on how to ensure a stimulating business environment, and how to attract additional foreign direct investments in order to accelerate the growth and enable a very fast recovery of the industry. But the economic burden of the pandemic is unevenly distributed: for example, sectors like tourism are hit much harder than technologically advanced production. Pilgram expects the same discrepancies to continue in the post-crisis period, where the flexibility to adopt to a new reality, working around remining restrictions, and taking advantage of the changed customers behaviour will be crucial for the success of individual businesses.
Crises, however, also reveal new opportunities, and making the most of them after the pandemic will be crucial for a fast economic recovery. Pilgram believes the opportunities in the countries of the region will be in attracting foreign investments in high added-value production and services. They will have to consider “a number of measures ranging from a stimulating tax environment, labour legislation that enables hybrid working models as well extensive investments in innovation, research and start-up environment”, he suggests, adding that the pace of the changes will define which of the economies will have the biggest success.