“There are decades where nothing happens; and there are weeks where decades happen”.
Lenin’s famous insight was highly relevant to 2020. It was full of such weeks as the coronavirus pandemic became a catalyst for major paradigm shifts in the economy. Of course, some sceptics still expect a quick V-shaped return to ‘business as usual’, but they have been wrong so far. And their analysis ignores the fact that change is not only inevitable in life – but also creates exciting new opportunities.
Last year clearly brought major changes to our personal and work lives. And not all of these were negative. Few of us have really missed the work commute, for example. And we have all enjoyed the novel experience of breathing fresh air in our cities, free of traffic fumes, and seeing a clear sky. We have also chosen to support local suppliers whenever we can. And the mounting piles of plastic bags from our online shopping have increased our enthusiasm for recycling whenever we can.
Of course, some of these changes may continue to evolve. It is certainly true that cooking has become the new commute for many people, and that lifestyle changes have led to a greater focus on home-life and personal relationships. But while this change suited those well-established in their work and family life, it was not so easy for those just starting out, or thinking of changing direction. Similarly, the job losses in the retail, travel, leisure and other industries have been brutal in their impact, highlighting the need for an inclusive response to the crisis.
This is where major industries such as chemicals industry has a great opportunity, and an enormous responsibility. Chemicals touch most people’s lives in a multitude of ways every day of the week. And chemical products have been a great force for good – in 1999, for example, Time magazine chose chlorine and water treatment as one of the most important developments of the last millennium. Plastics have had a similar impact in the decades since my old company, ICI, sparked their growth with the invention of polyethylene in 1933.
The key issue is the need to adapt these offerings to the needs of today’s New Normal. Plastics have proved a fantastic invention, but the value proposition for single-use plastics clearly needs urgent review. Does it really make economic sense to spend $50/bbl on buying oil, and more dollars on refining the oil and processing it into plastic packaging – only for this packaging to then be thrown away as soon as we get home? A similar question arises when we consider the environmental impact of waste plastic and the marine pollution that it can cause.
Doing nothing is also not an option. Legislators in the European Union have already adopted an aggressive €750bn Green Recovery plan. And US president-elect Biden has announced that green issues and climate change will be top of his agenda, along with the pandemic, once he takes office later this month. So while sceptics may continue to hope for a return to ‘business as usual’, future Winners in the chemicals industry and elsewhere will instead recognise that these challenges have created major new opportunities.
I will look at these in more detail next week.