The COVID-19 virus pandemic has completely changed the picture of the world. There is no branch of the economy that is not affected by the crisis caused by the pandemic. The cultural and creative industries, one of the most important sectors of the economy that leads in investment and employment and is growing faster than the average growth of other industries in the European Union, have been hit even harder by the pandemic than the tourism sector.
The ingenuity and dedication of various sciences came to the fore during the pandemic, the discovery of vaccines and the flawless collaboration between scientists, governments, health systems and regulators. But now comes the time when we can ask them what challenges remain before them in this 2022 year? The rapid pace of change will continue in 2022 and once again test the strength of the industry.
Human knowledge and skills have become a precious commodity
There is a shortage of people in the world with the skills and knowledge needed for science of this form. Concerns about the availability of people with the right skills and experience have deepened and could only worsen, given employment intentions.
Competition between talent hiring companies remains intense and labor costs are rising at the same time. This also worsens the situation, given the sector's intention to increase the workforce this year. Without the right people in the workplace, companies will find it difficult to reach their full potential. In this competition, the importance of understanding employee needs and developing a reward structure is what future employees value and employers really differentiate.
Inflation and financial costs have become unpredictable
Inflation as a term was recognized by all as a present danger. The inflation rate has reached a 30-year high in large economies and appears to be continuing this year and next. Rising labor costs are a key concern, as are energy costs, especially after the outbreak of war in Ukraine.
Financial costs are also present - interest rates are starting to rise in all branches of the economy and have no visible time end in the future. Despite these concerns, profit growth expectations remain strong. Meeting these expectations will depend on the ability of companies to increase the cost of sales faced with strong resistance. Because of the uncertain outlook for inflation, companies need to be able to react quickly when circumstances change.
Competitive advantage through the integration of sustainability into business
More and more organizations are concerned with environmental issues, social issues and corporate governance, and these ESG (Environmental, Social, and Governance) issues are high on the life sciences agenda. Mid-market firms seem to be lagging behind in terms of performance or measurement, compared to global organizations, and there is growing pressure to set measurable sustainability goals.
Procurement decisions in the health sector are increasingly taking into account compliance with the ESG, which will inevitably involve additional costs at a time when profit margins are already under pressure. The ESG requires a strategic approach, with the participation of the entire senior management team. Integrating sustainability into strategy and business model can create a real competitive advantage.
Digitization and technology development have contributed to progress around the world
Investing in technology is a clear priority across the healthcare sector, with more than half of companies planning to increase investment over the next year. A strong focus is on digitization, which is expected to continue later this year. The life sciences sector made a quantum leap during the pandemic, introducing changes that would otherwise have taken a decade. Investments in technology are seen as key to increasing efficiency in production and supply chains, helping to alleviate inflationary pressures.
Trends in investment in research and development are strong. As the global COVID-19 pandemic enters its third year, the science innovation system is setting new records in terms of investment, activity and scientific progress, with a growing number and range of new drugs reaching patients around the world. Companies are carefully considering how they can introduce or adapt technology to make processes more efficient.
Internationalization and strengthening of supply chains is one of the new trends
The main problem during the pandemic was a supply chain disruption. Across the science sector, companies are reviewing supply arrangements, making long-term strategic decisions aimed at shortening supply chains and strengthening local resilience to future problems. At the same time, the science sector wants to increase international sales. Companies are expanding their focus on international growth, despite the additional complications of high energy costs and concerns about transport infrastructure. There are growing thoughts about investing, and this is also a trend that will continue.
There are growing problems within companies in Croatia, and Grant Thornton experts are here to help you in any business. Bringing the idea and solution together, of a particular project, is the daily work of our highly qualified experts. Contact us with confidence!
Data source: Grant Thornton Global