AD: What are the top lessons that companies have learned from the COVID-19 pandemic?
van Puyenbroeck: I would say the top lesson is that insecurity is always around the corner. There is no such thing as a status quo anymore. Whereas companies used to embrace long-term planning, I believe that now being nimble and flexible is critical. You can still plan six months ahead, but based on what parameters? Who knows what the world will look like in six months? That is what we learned beginning with the COVID-19 pandemic, and now plenty of other factors and variables have been added to the mix, such as conflict, sky-high inflation, and trade barriers, all leading to incredible supply chain issues. The unknown stares at us every day. That is the world we live in. The lesson is that not only companies, but everyone in their personal lives, must be able to adapt quickly to new situations.
AD: Speaking of supply chains — any thoughts on what it will take to get them back to normal?
van Puyenbroeck: To rebalance things, we must get to a situation where more people are willing to work for the pay offered. The Fed is trying to address dealing with a recessionary environment. There is a staggering number of jobs remaining unfilled. According to Forbes, 2.1 million jobs critical to the supply chain manufacturing industry will remain unfilled by 2030. And that’s just in the U.S. This is not a gap that is easily closed. Rebalancing supply and demand, possibly through a recession, may partially take care of that. It’s also essential that we stay on top of COVID-19 because we are certainly not out of the woods yet. We cannot let our guard down. If there is another significant wave of infection, with more people sick and in isolation, it could be the final straw.
AD: As we emerge from the pandemic, what are the top challenges that U.S. companies face regarding global trade and investment?
van Puyenbroeck: Sadly, there are many challenges now; one is that we see trade being used more often as a political tool. There are sanctions and a variety of trade barriers entering the economic spectrum that companies now need to learn to work with. Tariffs and protectionism impact the free flow of trade, goods, and people. And there are, of course, the many components to current supply chain issues that we are all too familiar with: a shortage of raw materials and finished products alike, workforce employment-related issues, supplier dependencies and mismatches — it’s a long list throughout the supply/logistics chain. I mentioned rising inflation at double digits in many countries.
There is a tremendous struggle for talent where finding people to do the work is one part of the challenge; the bigger challenge is retention. Keeping your employees relies on many factors, from COVID-related absenteeism to the fact that many do not want to work for the pay offered. And if all this wasn’t enough, we have serious conflicts rising worldwide, in addition to climate challenges that are not going away, leading to serious migration issues — migration from conflict and migration from extreme climate changes, causing hunger.
Whereas companies used to embrace long-term planning, I believe that now being nimble and flexible is critical.
AD: What are some solutions for these pressing challenges to global trade and investment?
van Puyenbroeck: Companies realize they need a higher level of diversification in, and control of, their supply chain to mitigate risk, to spread risk. We certainly need more investment in people, ensuring people have skills for available jobs. We also need to rethink supply chains. Just-in-time delivery was the mantra for the past decades, with products arriving exactly when and where you needed them. Now, however, the idea of holding a higher inventory is not sounding so bad. There is a very different cost vs. benefit equation now.
There is not just one solution. Rethinking diversification is part of the solution. Rebalancing supply and demand is another. Monetary policies and how central banks will handle inflation will, of course, have a major impact on recalibrating the supply-and-demand question over time.
There is a tremendous struggle for talent where finding people to do the work is one part of the challenge; the bigger challenge is retention.
AD: What do companies need to invest in to stay competitive on the global stage?
van Puyenbroeck: It is a difficult question because it is so broad; I would narrow it down to investing in people and technology. They are not mutually exclusive. You must ensure that people are trained and have skills for the available jobs and for the jobs of the future. The current mismatch between labor and the skills required is enormous. Additionally, investment in technology to solve problems is essential, but from a policy perspective, we must ensure that technological progress does not leave people behind.
AD: How should companies prepare for the next global crisis?
van Puyenbroeck: We are not out of the global crisis; we are in the middle of what looks like a perfect storm. Insanity would be to continue doing the same things and expect different results. We all need to learn from these last years. Enormous flexibility is indispensable, and we must always expect the unexpected.
Companies realize they need a higher level of diversification in, and control of, their supply chain to mitigate risk, to spread risk.
AD: How do you see global trade and investment performing in the next few years?
van Puyenbroeck: There is much to consider: conflict around the world, climate challenges, mass migration, food insecurity and hunger problems, rising inflation, and polarized elections around the world. How we navigate these challenges will determine our future. I do see global trade fairly stable, but not at the growth rates we have experienced. Our ability to solve problems is being challenged at many levels. Where the trade flows, where investments are being made will be determined exactly by how we navigate through the storm.
About the WTCA
Headquartered in New York City, the World Trade Centers Association (WTCA) is an international trade association that facilitates and promotes international trade and development. The association serves as an international ecosystem that provides global connections, iconic properties, and integrated trade services. The WTCA has 300+ WTC licensees around the world in almost 100 countries — participants include free trade zones, airports, logistical hubs, universities, conference and exhibition centers, and organizations that focus on economic development. The vast majority of business members/tenants of these World Trade Centers are small- to medium-sized businesses.