Macquarie Group has identified four themes for 2021 in light of how the world has adapted following the pandemic, and urges firms will need to remain adaptable if they wish to be successful next year.
In its outlook for 2021, Macquarie Group said this year had been characterised by acceleration and disruption but that 2021 would still likely require firms to be adaptable. While a vaccine had now been created, there would still be changes ahead as people and companies adjusted to the new environment.
“Whilst the global themes of this year have seen acceleration and disruption, 2021 will mark a shift towards cautious optimism and a broad-based economic recovery,” the firm said. “The expectation of a vaccine in 2021 is a hopeful sign that the worst is behind us.”
“This, combined with growing consumer confidence, increasing sector resilience, a softening of geopolitical dialogue (due to a Biden presidency), low interest rates, significant competition for assets, and strong valuations provide a positive backdrop as 2020 draws to a close.
“However, the lesson from 2020 is that corporates, government, and investors alike will need to remain adaptable in the face of uncertainty and innovative in the pursuit of desirable projects.”
The firm had identified four themes which presented opportunities for firms and for investors in the coming year, which had all arisen as a result of the pandemic changes this year. These were digitisation, urbanisation, energy transition and digital defence.
In digitisation, investors were urged to consider areas such as the deployment of 5G and cloud infrastructure as a service (IaaS).
The urbanisation theme took advantage of the change to people’s working patterns to drive more regional and transport infrastructure projects, which would also be used by the Government as a recovery stimulus.
Like digitisation, the digital defence theme focused on cyber security in light of increased online scams.
Energy transition, meanwhile, focused on companies’ attempts to reduce carbon emissions and increase their ESG accountability by setting goals and targets.
Kate Vidgen, head of energy principal at Macquarie Capital, said: “2020 marked a turning point for many corporates in Australia in terms of setting meaningful targets to reduce greenhouse gas emissions and invest in technology required to meet Australia’s Paris commitments.
“Whilst there is much more work to be done, in 2021 we expect to see Australian corporates continue to move ahead of policy to meet their ESG obligations, a growing pool of green capital driving new investment, and traditional energy players reinventing themselves as decarbonisation champions.”
