This insight was first published as part of NCUB’s State of the Relationship 2021 Report. Read the report in full here.
The Covid-19 pandemic has trained a spotlight on business – from how firms collaborate with stakeholders, to how responsible and agile they are. Coming at a time when a wider tech revolution was already underway, many organisations have used the pandemic to accelerate their digital and ESG strategies.
But not all firms have had the same pandemic experience. While some have weathered the storm well, responding quickly to the challenges of social distancing, others have had a torrid 18 months dealing with plunging incomes and reduced access to finance.
As we approach 2022, businesses are increasing their focus on improved resilience, sustainable recovery and greater productivity. At the same time, they’re coping with supply chain issues, labour shortages and inflationary pressures.
Turbulent times for aviation
The aviation sector has endured the worst crisis in its history. While some of the larger airlines have been able to raise funds to shield themselves from the downturn, regional players, such as Stobart Air, have become casualties of the crisis. Although green shoots of recovery are starting to emerge – IATA says net industry losses are expected to fall to US$11.6bn in 2022 after a US$51.8bn loss in 2021 – Heathrow Airport has revealed that it does not expect passenger numbers to recover fully for five years.
The wider aviation industry has also felt the pain of the decline in passenger numbers. Aircraft deliveries dropped and maintenance checks plummeted as demand for air travel fell in 2020.
However, in July 2021, Airbus announced a surge of deliveries in June, notching up a total of 297 aircraft handed over in the first half of 2021.
Sustainable post-pandemic recovery and innovation are driving much of the sector’s collaboration efforts, with major firms, start-ups and universities looking to address these issues through projects aimed at cutting carbon emissions, experimenting with composites, increasing automation and developing sustainable aviation fuels. For example, the new Digital Aviation Research and Technology Centre (DARTeC) at Cranfield University will enable researchers to work with established industry partners and SMEs to advance the application of digital technologies in the air transport sector.
Banking on change
The financial services sector responded quickly to Covid-19. The rollout of digital technologies and the rise of fintech firms was well underway before the pandemic and there have been opportunities to intensify deployments in this area since then. However, both KYC and cyber-security challenges have had to be addressed.
Capital markets firms experienced higher trading revenues as markets rallied after the volatility of the early days of the pandemic. However, insiders say the financial services sector will likely be hardest hit by second-order effects caused by the deteriorating credit quality of customers and the after-effects of the pandemic being felt throughout the real economy.
Collaboration between industry and academia has long been important to the fintech sector and these opportunities continue. In October, NatWest and the University of Warwick opened a new business accelerator hub to support students and local entrepreneurs and company owners to grow their businesses in industries such as fintech. And in Scotland, the University of Edinburgh is involved in the Global Open Finance Centre of Excellence (GOFCoE) – a collaboration between the university, the Financial Data and Technology Association (FDATA) and FinTech Scotland – to build a data-driven research and innovation hub for financial services and fintech, serving the public, private and third sectors.
The life sciences sector is in a unique situation in which it is able both to provide solutions to the pandemic and be subject to some of the shocks of the past 18 months.
Its ability to roll out rapid diagnostic testing and treatments as well as develop vaccines is providing opportunities to boost revenues and collaborate with stakeholders from universities and businesses. The opportunity to combine leading life science expertise with the global development, manufacturing and distribution capabilities of major firms was a key feature of the high-profile UK collaboration between AstraZeneca and the University of Oxford which resulted in the development and distribution of one of the first Covid-19 vaccines.
The sector is continuing to accelerate telehealth plans, expedite trials for treatment and deploy digitisation, robotics and AI technologies to assist with diagnostics and treatment. An easing of competition rules and greater flexibility from regulators has helped life science firms to cooperate and secure the supply of medicines and equipment during the pandemic as well as achieve more rapid drug and vaccine approval processes.
In the longer term, the sector needs to ensure it has sustained funding for research and innovation as public debt could put pressure on government funding for universities and research institutions.
The pandemic has certainly acted as a catalyst for change for businesses and academia. Investments in IoT, blockchain, 5G and automation technologies are helping to boost productivity and cut costs. Likewise, digital tech offers more chances to collaborate, providing opportunities to work with a broader range of partners.
The global nature of the pandemic has highlighted the importance of robust international relationships in dealing with the twin challenges of Covid-19 and the climate crisis. However, while there is going to be an increasing need for international collaboration between public and private sector partners, this is likely to be tempered by public budget constraints and geopolitical tensions.