FROM E-FITNESS TO CYBERSECURITY - WHAT INDUSTRIES ARE SET TO BOOM AFTER THE CORONAVIRUS?
Over the past year, the coronavirus pandemic has irrevocably changed the way we live our lives. According to estimates from the Office for National Statistics (ONS), one in seven people in private households has contracted the virus. Even for those who weren't affected directly, few have remained exempt from challenges posed by the national restrictions and the subsequent recession.
But aside from impacting just our daily lives, the public health crisis has also caused devastating damage to some of the UK's most vital industries. While some sectors, namely those who rely on travel and consumer-facing services, have clearly had a more challenging time adjusting to the reality of COVID, other industries have come up with dynamic solutions in order to stay afloat. From adopting new business models that tap into new consumer demands, to digitally transforming their company to streamline their operations, businesses from just about every industry have been forced to transform themselves to prevent getting left behind.
So, while the business landscape in the UK will continue to shift as we move further into the future, in this article, we set out to identify which industries will likely continue to boom once the virus is over. From the sectors that have been lucky enough to stay relevant throughout the pandemic, to the industries that have adapted to the changing circumstances, we'll address what types of businesses are likely to flourish in a post-COVID world - and explain why this might be.
However, before we run you through our best industry predictions, let's first take a look at how the events of the coronavirus have impacted the UK economy.
ECONOMIC FALL OUT FROM COVID
In addition to having one of the highest COVID-19 death rates globally, the UK also suffered one of the biggest economic setbacks. Since the onset of the virus in 2020, our national GDP shrunk by a whopping 10%, marking its steepest decline in more than 300 years. This put our economic performance behind any other G7 nation, as well as every country in the EU, except for Spain.
The impact this had on British businesses was severe. According to figures compiled by the Local Data Company, throughout 2020, an average of 48 enterprises closed permanently across the UK every single day. This amounted to 17,500 store closures throughout the whole year. While few sectors were exempt from this impact, due to nationwide stay-at-home measures and bans on non-essential international travel, the tourism, transport and restaurant industries experienced the most considerable losses.
2021 has painted a slightly more optimistic picture for the UK's core industries; unfortunately, stumbling blocks still remain in place. According to data from LSE's Center for Economic Performance (CEP) and the Alliance for Full Employment (AFFE), nearly 15% of UK businesses are still facing a risk of imminent closure, with 'micro-businesses' and those with under ten employees being particularly vulnerable.
HOPE AT THE END OF THE TUNNEL
Despite challenges remaining, after 12 months of the crisis, glimmers of hope are starting to emerge. Subject to the success of the NHS's robust vaccine programme, the government have announced their roadmap to recovery. In this proposal, they detail when businesses and venues may be able to re-open again. So, if the virus remains contained and case numbers continue decreasing, the economy is predicted to return to its pre-pandemic size as early as next 2022.
What's more, as lockdown measures continue to relax, UK's employment figures are currently 2 million lower than what was projected last summer. This is in large part due to the government's comprehensive furlough scheme, which has 'topped up' the wages of over 11 million jobs since its inception in March 2020. Additionally, due to almost £180 billion of government support in the form of emergency state-backed lending programmes like the Bounce Back Loan Scheme (BBLS) and Coronavirus Business Interruption Loan Scheme (CBILS), thousands of businesses that have been struggling due to COVID have been able to keep their lights on through the worst of the crisis.
Finally, with UK households accumulating decent savings throughout the pandemic, there are also hopes that a consumer-led economic recovery might take place. According to data from the Office for Budget Responsibility (OBR), households across the country are expected to gain an extra £180 billion in collective savings by the middle of 2021. By OBR's estimates, if this capital is spent over the next four quarters, it would contribute to a 6% rise in consumption in 2021 and 2022, which would have the potential to revive a number of the UK's suffering business sectors.
So, with this in mind, what sectors are predicted to boom in a post-covid future?
WHAT SECTORS ARE EXPECTED TO BE ON THE RISE AFTER COVID?
Since gyms and other leisure facilities were first ordered to close on the 20th of March 2020, those operating within the fitness industry were forced to switch their services online. These restrictions saw in-person fitness venues and freelance professionals suffer instant losses, with the revenues of The Gym Group, Britain's largest operators of low-cost gyms, falling by 48% due to nationwide lockdowns. However, for those who were able to adapt by launching E-Fitness services, the lockdown period heralded massive opportunities for growth.
As a study by The New Consumer found, since the start of the pandemic, 76% of people in the UK have pivoted to home workouts, with 66% of those preferring it to exercise in physical venues. While the closure of in-person fitness facilities was a big driver behind this switch, growing desires to look after one's physical, mental, and emotional well-being also contributed to the rise of the virtual fitness sector.
As part of this digital fitness upsurge, Zoom fitness classes and YouTube workouts rose exponentially, and activity sharing site Strava gained two million users every month in 2020. The stay-at-home restrictions even led to the rise of immersive gyms, which are multimedia environments that virtually transform entire rooms into floor-to-ceiling workout spaces. However, with fitness facilities on track to open throughout April of this year, what does the future look like for businesses that rely on virtual fitness practices?
Well, as the global wellness platforms Mindbody and ClassPass have predicted, as lockdown measures continue to be lifted, it's likely that we could be entering an era of 'hybrid fitness'. Even long before the events of the pandemic confined us to our homes, activity trackers and online fitness communities were seen to be on the rise. So, now that large swathes of the population have familiarised themselves with E-Fitness services and have set up fitness facilities in-house, it's likely that remnants of the home gym will stay in place for a long time to come.
Another industry that is likely to continue flourishing even after the coronavirus is over is gaming. Even before the unique events of the pandemic took place, the UK's gaming industry was growing at a significant rate. So, with national confinement measures leaving the population with an abundance of spare time and a growing desire for escapism, it's no surprise that businesses within the gaming and entertainment sector continued to rake in profits throughout the crisis.
According to a report by the gaming industry body Ukie, the video gaming sector in the UK surged to a record £7 billion during lockdown. This pushed the industry's value up by 29.9% when compared to 2019. While there were increases across both physical and digital sales, digital sales saw the most significant increase at £3.9 billion compared to 2019, compared to a £646 million rise in traditional boxed game titles.
This growth was also echoed in the US, with the game industry giant Microsoft reporting a 130% increase in multiplayer engagement, and Nintendo Switch sales rising by 24% compared to the year previous. Remarkably, revenues weren't the only thing on the increase. From November 2018 to April 2020, the creative workforce in the UK expanded by 12.2%, with smaller development studios and micro studios witnessing the most significant gains. However, one crucial question remains: is this trend here to stay?
According to this report by Deloitte, around a third of consumers are likely to maintain gaming practices even after the events of the pandemic come to an end. This is primarily due to the rise of cloud gaming services. These services, also referred to as 'streaming platforms', allow users to access a wide range of releases and a back catalogue of games in a similar vein to video streaming services like Netflix.
With these services being on the rise before COVID, and tech giants like Apple, Google, and Microsoft already entering the cloud gaming market (with Amazon joining later this year), it's likely that the UK's massive gaming industry will continue to rake in steady profits even after lockdowns restrictions are lifted.
Augmented reality, or 'AR', is a technology that superimposes computer-generated images, audio, and other sensory stimuli, into real-world events. Unlike virtual reality, which replaces what people see and experience, augmented reality adds to it. Unsurprisingly, the use of AR technology has shot up in the past year, largely as a way for companies to reduce the risk of contamination by allowing customers to access retail experiences from their own home.
Allowing customers to 'try-before-they-buy', from previewing furniture with brands like Ikea, to trying on luxury fashion by retailers like Louis Vuitton and Gucci, AR has quickly become a valuable way for people to preview products safely before making a purchase. To date, according to research from Gartner and Get App, while only 15% of UK consumers have tried AR shopping, more than half have reported being willing to try it out in the future.
However, even after stay-at-home measures are lifted, and in-person shopping experiences are able to resume, it's likely that virtual fitting room technology will remain on the uptick. According to Fortune Business Insights, the virtual fitting room market is expected to be worth an estimated £723 billion globally by 2027. Among an array of factors, AR retail services will continue to provide consumers with a valuable alternative to in-person shopping for years to come because of the technologies improving accuracy, advancing facial recognition software and impressive device compatibility.
However, retail isn't the only industry that is expected to utilise AR technology in the future. According to Technavio, the global VR industry is projected to grow by £89.8 billion between now and 2024. This is because the technology is able to be deployed for a wide range of purposes, including indoor and outdoor navigation, immersive gaming experiences, the designing and prototyping of products, and even helping surgeons to visualise which areas they intend to operate on.
Even before the pandemic, online learning was on the increase. However, due to the coronavirus and the restrictions placed on in-person learning facilities, demand for e-learning facilities reached unprecedented highs throughout 2020 and into 2021.
The majority of this growth was seen in traditional education facilities like nurseries, primary schools, secondary schools, and universities. At the start of the pandemic, 'emergency remote teaching' was implemented to deliver quality interactive education to students who were not able to safely visit physical classrooms. Then, as in-person teaching restrictions were lifted throughout summer 2020, many educational facilities adopted a hybrid 'HyFlex’ model for learning, which enabled students to experience a combination of remote and face-to-face teaching. So, once social distancing measures are fully lifted, one question remains: is the use of ‘EdTech’ likely to fade out altogether?
According to a survey carried out by Times Higher Education, at least in UK higher education institutions, e-learning technology will remain a core component for decades to come. When asked about the future of technology in education, 63% of university leaders predicted that universities would offer complete courses online by 2030, in an effort to keep up with the growing demand for online learning.
This uptick chimes with the broader growth of the online education sector. As the benefits of cost-effective and adaptive learning experiences are becoming more widely known to people outside of traditional education, more and more are seeking ‘smart’ education platforms and fresh learning solutions. This growth in demand is evidenced in the rise of numerous UK based EdTech startups like MyTutor, Tech Will Save Us, and Kide Science, who are expected to rise in popularity even past COVID, as well as the expansion of the wider e-learning market, which according to analysts from MPMG, is projected to be worth £250 billion globally by 2025. Virtual meeting platforms
Another tech-based industry that has risen to success as a result of COVID-19 is online meeting platforms. Since March of last year, workers in the UK were ordered to work from home (if they were able to do so). This forced companies across the country to rely on digital infrastructures, like online meeting platforms, to keep their teams connected and communicative throughout the pandemic.
While it’s true that the industry was already on the up before 2020, global stay-at-home requirements kicked the success of virtual meeting platforms into overdrive. According to this Aluates report, the global web conferencing market size has been projected to rise to £4612 million in 2026, up from the £2675 million it was worth in 2019. However, due to the recent surge in demand for this software, the industry's evaluation has already succeeded these estimates in 2021.
Out of all the web conference platforms out there, Zoom was the clear winner throughout the pandemic. The company reported 169% year-on-year growth in the first quarter of 2020 alone, with the platform hosting an average of 200 million daily users in March, and 300 million daily in April. Due to the growing amount of traffic on the site, the firm was recently estimated to be valued at over £42 billion, which is almost four times more than it was worth before COVID-19.
But Zoom wasn’t the only virtual meeting platform to make big profits from the pandemic - Microsoft Teams also incurred massive gains. Its customer base expanded from 20 million users in November 2019 to a staggering 75 million by April. Business of Apps estimates that the company generated around £4.9 billion in 2020, a 700% increase from the year before.
Although it’s inevitable that demand for these services will dwindle as businesses open their doors in the near future, remote conferences are still expected to play a big role in our workday going forward. By continuing to carry out meetings remotely, companies are able to cut their overheads while employees are more free than ever before to eliminate their daily commutes. For these reasons, it’s very likely that most workplaces will be entering a ‘hybrid’ future, that rely on a combination of both in-person and remote meetings.
Cybersecurity is another industry that is expected to continue growing in the post-COVID future. Since the pandemic began, cyber attack cases instantly shot up across the globe. And with cyber threats only expected to rise in the future, the industry is likely to go from strength to strength in years to come.
Throughout the pandemic, the UK cybersecurity sector increased in size, workforce, and revenue. In terms of industry expansion, according to this report by Ipsos Mori, the number of cybersecurity firms in the UK grew by 21%, making it one of the precious few industries to expand throughout 2020. Subsequently, with the number of cybersecurity businesses growing, employees working within the sector also grew as a consequence, with around 3,700 new workers entering the industry in the first month of the coronavirus pandemic. With regards to yearly profits, within the past year, cybersecurity generated over £8.9 billion in the UK alone, which is a 7% improvement from the previous year.
Even though the increased use of digital tools throughout COVID-19 is a big reason why the cybersecurity business boomed, cyberattacks aren’t likely to subside once we’re spending less time online. According to Tech News World, cyberattack incidents occur five times as frequently as they did five years ago. So, as we move into the future, and cyber threats increase in number, size, and sophistication, an increasing number of people will likely rely on cybersecurity products and services to keep themselves safe (and their privacy protected).
Another UK industry that the pandemic has accelerated the growth of, is automated manufacturing. Automated manufacturing often includes machinery taking the place of humans in factory and warehouse settings, and while industry 4.0 and the automation of manufacturing technologies is nothing new, the events of the pandemic led to a massive spike in interest in the sector.
One reason that COVID-19 has caused more companies to harness automated manufacturing practices is because they lowered the risk of contamination in the workplace. By replacing human assembly lines with machine line automation, companies were able to massively reduce the risk of viral transmission. Additionally, for the workers who remained, the implementation of intelligent, real-time tracking technology helped employees adhere to social distancing rules, allowing them to stay safe as they carried out their duties.
Another reason that the sector grew during the coronavirus is due to the viruses’ impact on national supply chains. During the first wave of the UK’s lockdown, the vulnerabilities of our existing supply chains were highlighted. This led manufacturing and logistics companies to search for automated technology that was able to facilitate more transparent, flexible, and flexible supply chains.
While COVID-19 will gradually pose less of a threat to our society, the UK’s manufacturing sector will most likely continue to benefit from automation long into the future. By improving the efficiency of the workplace, reducing supply chain flaws, and also saving human workers from carrying out repetitive and occasionally dangerous tasks, the automated manufacturing industry is likely to increase in size and scope throughout the rest of 2021, and in the years to come.
While some industries are lucky enough to show signs of strength as we enter into a post-COVID future, we understand that most businesses are still experiencing significant cash-flow shortages. So, if you’re a business owner who is seeking some temporary financial support, Market Finance is here to help.
Market Finance provides SMEs with flexible funding solutions, with generous rates and no hidden fees. We make things as easy as possible with our innovative online platform, and our excellent customer support team is at hand to help you through every stage of the process. If you’re interested in what we can offer your business, visit our website and apply for a same-day quote today.