It will take creativity to successfully navigate a COVID-19 recovery

At a recent webinar hosted by Canaccord Genuity’s capital markets division, our CIO, Michel Perera, discussed how businesses and investors can navigate a COVID-19 recovery. He was joined by Simon Bridges, Head of European Investment Banking at Canaccord Genuity Capital Markets and Ed Warner, Chairman of Grant Thornton.

History shows us that crises breed creativity and innovation. The death of thousands of horses in an 1815 famine led to the invention of the bicycle; the manufacturing assembly line became prevalent after the Spanish flu pandemic; and this time - in the space of just 10 weeks - we have had a 10-year technology and working revolution. Albeit from different perspectives, each of our panelists explored how we can expect to see great and surprising innovations as businesses and investors look to navigate a COVID-19 recovery.  

Watch a recording of the webinar here:

This video was recorded on 8 July 2020.

How will businesses innovate and who will be the winners?

Ed Warner believes those organisations that have grasped opportunities to tailor their offerings are going to come off best, whether that is deploying their imagination, being flexible or communicating more proactively with their stakeholders. Referencing an aviation company – a sector hit hard by global lockdowns – through their decisive action, proactivity, and ingenuity, the company managed to keep doing business by helping to supply emergency aircraft for things like PPE distribution and collecting people off cruise ships. Remarkably, its shares are now 28 pence above where they started at the beginning of the crisis.

The same goes for a return to doing normal things like going to the pub or sitting in a football stadium. While we can wait for a vaccine or a natural waning of the potency of the virus, it will be those businesses who adapt and get on the creative front foot that will seize the competitive advantage. We’ve already seen rapid innovation and change in lots of areas – even in auditing as Ed explained, deploying workarounds to get the job done. Those business that can be creative and act sooner rather than later will be the winners.  

Will a focus on the economic recovery mean the green agenda will suffer?

While consumer spending is essential if the economy is to recover, there’s no reason why spending and economic activity should be bad for the environment, according to Michel Perera. Thanks again to the innovation taking place in areas such as battery technology and supply chains, we can create economic growth without damaging the environment. It is this drive which is bringing ESG (environmental, social and governance) investing into the mainstream as we seek investment opportunities that are innovatively meeting the world’s real needs as well as delivering a sustainable return.

Simon Bridges is encouraged by what he’s seen in the capital markets: lots of companies going through fund raises, very supportive investors, no liquidity issues in banks and a few green shoots for the prospects in M&A. Responsive management teams and strong, flexible businesses have emerged from the lockdowns and the outlook for future activity is positive.  

Despite an uncertain future, the challenges are driving creativity in response to changing customer and world needs. History shows us these experiences breed human ingenuity and it will be those businesses and individuals who are most flexible and creative in their approach that will benefit the most and successfully navigate a COVID-19 recovery.

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