The future of the energy industry landscape has long been up for debate, and the effect of COVID-19, combined with the dramatic global oil price crash and its detrimental impact, has brought this to an unparalleled level.
Job losses remain a key concern for the industry, particularly in the oil and gas sector with leading trade association, Oil and Gas UK, predicting as many as 30,000 jobs could be lost if the situation sees no improvement.
However, despite the bleak outlook, there are windows of opportunity for this sector to adapt. For smaller businesses, this means looking at implementing new ways of working by prioritising new product and service offerings, accelerating investment in research and development, and understanding changing market requirements. All will be of critical importance if smaller firms are to survive these extraordinary times.
We are already witnessing businesses being forced to adapt out of necessity, with firms reducing capacity to critical manning levels as a result of social distancing measures and also reducing their orders, while major service companies are focused on providing essential services only.
Moving forward, the industry will require a more dynamic approach to overcome the challenges in the medium to longer term. Historically, it has been slow to adopt new technologies, and the benefits associated with addressing these issues have proven hard to implement and realise.
Smaller businesses are often nimbler and better placed to respond quickly and effectively, so it is important that they seize the opportunity to address the industry issues. New ways of working will have to be readily adopted and practiced if firms hope to shore up their operational resilience and secure their survival.
Businesses must now embrace the behavioural changes which have arisen due to the impact of COVID-19 on the energy market. Understanding this will allow teams to become more agile and to identify new opportunities including diversification to successfully target and enter new markets. Previous downturns have seen reduced investment in research and development, with businesses both large and small struggling to invest in new technologies. The coronavirus pandemic has seen this heightened to new levels, as firms struggle with profit losses and the combination of cessation and stalled projects.
While these changes to ways of working may seem beyond reach, there is support available. At Business Gateway, the team can help any business, large or small, get on the right track towards sustainability and growth. This includes strategy advice, business planning, market assessment, and digital services. The team can signpost to funding opportunities, with the potential for investment in new research and development technologies or entering new markets. The team can also facilitate introductions to vital contacts to help businesses progress to the next level.
Recently, in response to COVID-19, Business Gateway has launched a new service named ‘Redundancy to Recovery’, aimed specifically at individuals who are facing redundancy and may be looking to start their own business.
Riding this unprecedented storm will not be easy, but by thinking outside the box, developing ground-breaking new approaches and service offerings, existing SMEs and start-ups should be in a stronger position for survival and able to compete with other industry players.