In September, the Kenan Institute of Private Enterprise at UNC released a report on how COVID-19 is reshaping the U.S. economy. They argue that the pandemic and its anticipated aftermath reveals vulnerabilities in our current economic systems, and that it will permanently change the way we do business. These changes also create new opportunities for small businesses in North Carolina.
What Are the Seven Forces Reshaping The Economy?
The Seven Forces Reshaping the Economy, as identified by the Kenan Institute, are listed below. We’ve included a summary of each trend to get you started. You can read more details in the full North Carolina opportunities report.
- Changes in work, travel and migration patterns: In short, remote work is more common, travel is less common. People will choose places to live based on where their family is, and/or where they think they’ll have a high quality of life. North Carolina could attract highly-paid remote workers by showcasing its superior amenities and lifestyle options.
- Accelerating shifts toward on-demand and at-home retail: Online shopping is king. Consumers will look for custom, locally-sourced products and services.
- Onshoring and widening of supply chains: Because of disruptions from COVID-19, we now want to make more things in the U.S., just in case something else goes wrong internationally. Additionally, larger backup stock of essential products will become more common.
- Renewed focus on diversity and dismantling systemic racism: Businesses are now more willing to take a stand and signal to customers that they take these values seriously. Thankfully, it looks like North Carolina is off to a good start. According to career search company Zippia, North Carolina is the ninth-most supportive state for Black-owned businesses.
- Upending of education and childcare: Due to health concerns, parents must have their kids at home 24/7. Understandably, this change creates problems, especially for women and single-parent households.
- Shocks to healthcare and pharmaceutical demand: Hospitals are losing money because elective procedures are being delayed, and they have to care for many sick people. More people would rather get care remotely.
- Risk reassessment by capital providers: In other words, it’s about to get harder for startups and small businesses to get a private loan.
These Seven Forces Create Compelling Opportunities for Small Businesses and Startups
The authors of the report argue that these fundamental shifts will create new winners and losers as the economy restructures. North Carolina could be one of the winners, if certain steps are taken.
Some of these steps necessitate government action. For example, the report recommends that local governments streamline zoning and construction permits so that cities can adapt to new space requirements for restaurants and other businesses. Other steps, for example restructuring the pharmaceutical supply chain, are probably more feasible for larger, established industry players. A few opportunities, however, are perfect for small businesses and new startups. We’ve identified six opportunities below.
1. Small Businesses Could Provide Technology Solutions for Remote Conferences
Flying people to conferences across the country (or even across the globe) has always been costly for businesses. The pandemic has temporarily put a stop to such travels, but even when the health dangers have passed, businesses may prefer to stick with remote meetings. The catch: remote meetings are hard to pull off well. There is a market for reliable, tech-based solutions for holding remote conferences. The report’s authors name our need for tech solutions. (Are you considering hosting a webinar in lieu of an in-person conference? Check out our webinar guide to get started).
2. NC Residents Could Offer Secluded Vacation Rentals for Local Travelers
People will still want to take vacations, but how and where they travel will change. North Carolina is abundant in natural beauty. Homeowners and businesses can take advantage of that fact by renting out their properties to travelers. Making rental accommodations self-contained, and marketing them as remote getaways, may be smart strategies to pursue customers still worried about the pandemic.
3. Bespoke, Highly-Localized Products and Services Will See a Resurgence
While many retail stores are taking a hit right now, the Kenan Institute predicts that high-end, locally sourced products will become more popular. North Carolina small retail businesses or food services should look into solidifying their online presence and focusing on local and custom products to meet this change.
4. Supply Chain Restructuring Will Create Management Opportunities for Small Businesses
Supply chains are seeing major shake-ups due to COVID-19. Onshore manufacturing of products like pharmaceuticals and medical supplies now looks more attractive. However, it will take years to build up the capacity those products need. Thankfully, this means North Carolina startups and small businesses will have plenty of time to build expertise in supply chain management. Relevant technological solutions and consulting services will both be in high demand in the coming years.
5. Upending of In-Person Education System Creates Need for Tech-Enabled Educational Products
There is one bright spot – the upheaval of such a long-standing system means there is now room for innovation. Specifically, we need educational products that use technology to facilitate learning while minimizing the need for in-person supervision. If North Carolina startups can come up with useful, cost-effective products, that could make a big difference nationwide.
6. Telehealth And Retail Telemedicine Are Major Opportunities for Small Businesses and Start-Ups
Telehealth start ups have been booming recently. Patients like the convenience of being able to talk to their doctor remotely. Plus, during COVID-19, remote visits could be a lot safer than going in person. North Carolina start-ups are already taking advantage of this growing market.
Other health-related start-ups will also be attractive going forward. Retail telemedicine is a growing trend where doctors can prescribe patients medicines online. Retail-telemedicine companies then deliver those medications directly to the patient. This structure bypasses traditional doctors’ offices and pharmacies entirely. In the past few years, this option has been especially popular for sensitive drugs like birth control or baldness treatments. However, it seems likely that this type of care delivery will continue to expand into new products and new cities, given the new public taste for telemedicine.
For more information on how the pandemic impacts North Carolina’s economy, check out our overview of COVID-19’s effect on NC startups.