Matt Cowley: Five factors that will impact businesses in 2021

There are five factors that businesses will need to consider over the coming year, writes Matt Cowley. Photo / Getty Images

OPINION

During a relaxing summer "staycation", I had time to reflect on the five key factors that will impact on businesses in 2021.

The main factor is the successful roll-out of the various vaccines across the world. This will take a few years before it is effective as the logistics are challenging for wealthy countries, let alone for developing countries.

New Zealand is buffered by the relative success of our top trading partners – China and Australia – to manage infection breakouts.

The second factor is how well businesses can manage change.

This includes digitising their services, leading their people, raising capital and responding to new surprises.

There will be a lot of pressure put on business owners to make decisions and revisit strategies throughout the year.

Some small businesses will struggle to stay ahead of the rapidly changing environment, while others will flourish.

The third factor is dealing with the rising cost of doing business.

Every business owner will need to deal with the Labour Government's increasing minimum wage, and extra sick and stat day leave – these policies are here to stay as Labour robustly campaigned on these issues and the country voted for them in a landslide election.

Then there's rents, council rates, insurance and compliance all putting the pressure on many business' bottom lines.

Small businesses in particular will need to get innovative to survive and thrive.

Many businesses are looking to automate their processes to reduce staffing costs and minimise risk of operational shutdowns during any future lockdowns.

For example, some local restaurants are using QR codes to order and pay for food at your table when you sit down, allowing them to reduce staffing costs and speed up customer processing.

The fourth factor is the roll-out of the Government's economic recovery plan.

There is a strong pipeline of capital projects that will maintain confidence in the construction sector.

Tauranga Chamber of Commerce chief executive Matt Cowley. Photo / File

The Government's vocational training initiatives are also helpful.

The key Government decisions will be an overhaul of the Resource Management Act, delivery of the capital projects, and its ability to work with the private sector to address housing shortages – an issue which impacts business owners, workers and customers.

The fifth factor is the Government's border-control policies for students, tourists and workers.

New Zealand's border strategy has worked at protecting our level 1 freedoms, but we need to think outside the box long term to support our economic recovery.

Will there be a nuanced, risk-based approach to allowing foreign students, workers and possibly tourists into the country?

- Matt Cowley is the chief executive for the Tauranga Chamber of Commerce