The Covid-19 pandemic is set to increase companies' investments in intangible assets – such as research and development, software and patents – by 11 per cent as a shift to remote working erodes the importance of physical assets, according to the Carlyle Group.
The rise in intangible investments during this pandemic-triggered recession is 1.5 times higher than the "asset-light" trend following the 2008 global financial crisis and may result in a slower recovery in employment, according to a September research report by the US private equity and asset management company.
Intangible assets include all non-physical assets such as goodwill, intellectual property, human capital, data and technology.
The report highlighted that a post-pandemic recovery will not be swift.
"As the pace of digitisation accelerates, investors would be better served to think in terms of the differences between business models rather than differences between industries," Jason Thomas, head of global research at the Carlyle Group, said. "As such, 'technology' may no longer be viewed as an industry in its own right but instead understood as the key differentiator between all companies irrespective of industry."
The Covid-19 pandemic has tipped the world economy into the worst recession since the 1930s Great Depression, disrupted global supply chains, hampered international trade and dealt a blow to key sectors from aviation to shipping. Globally, the virus has infected more than 35.4 million people while the death toll exceeded one million, according to data from Worldometer. More than 26.6 million people have recovered.
The Carlyle Group's report highlights key trends of how the coronavirus-triggered recession will impact business conditions in future.
Currently, the crisis has highlighted wide variations in performance between industries, with businesses in IT and healthcare growing during the pandemic, while hospitality and tourism took a hit during the lockdown. Over the next two years, however, the biggest variances will be between companies in the same sector as some prove better at technological transformation than others.
"It is likely that, as in the last recession, the most salient disparities in two years’ time will be between companies within the same industry, as some management teams successfully reinvent their businesses while others futilely endeavour to get back to January 2020," Mr Thomas said.
The recession, which has dealt macroeconomic shocks, will accelerate changes in business models as companies re-think their strategies and organisation, adopt technology and move towards "asset light" models, the report said.
The rise of digital business models and intangible assets has made it more difficult to define the true value of a company, though, as these concepts are not reflected under current accounting rules.
"It may be that 'asset-heavy' value stocks underperformed to such a great extent this year precisely because remote working has sensitised investors to the risk that future cash flows will come to depend less on physical assets, like offices," Mr Thomas said. "As the pace of digitisation accelerates, this risk premium for obsolescence may have to widen further, turning the 'value premium' into a 'value trap'."
Finally, the current outperformance of the technology sector may actually disappear when examining companies' business models.
Tech-enabled digital platforms tend to outperform the broader market whether they operate in health care, retail, autos or beverage manufacturing, the report showed.
"2020 may be the year that 'technology' stopped being thought of as a sector in its own right and more of the key differentiator between all companies irrespective of industry," Mr Thomas said.
These business trends show that the coronavirus-triggered recession will impact economic and financial conditions for some time to come, the report concluded.
"Many corporate executives will use this time as an opportunity to rethink and re-imagine their businesses in ways that accelerate the pace of digitisation and cause more investors to categorise in terms of business models rather than industries," Mr Thomas said. "There is nothing wrong with optimism, but those who conceive of this shock as a temporary disruption seem likely to miss much of what’s to come."
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
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Company%20profile
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Stuck in a job without a pay rise? Here's what to do
Chris Greaves, the managing director of Hays Gulf Region, says those without a pay rise for an extended period must start asking questions – both of themselves and their employer.
“First, are they happy with that or do they want more?” he says. “Job-seeking is a time-consuming, frustrating and long-winded affair so are they prepared to put themselves through that rigmarole? Before they consider that, they must ask their employer what is happening.”
Most employees bring up pay rise queries at their annual performance appraisal and find out what the company has in store for them from a career perspective.
Those with no formal appraisal system, Mr Greaves says, should ask HR or their line manager for an assessment.
“You want to find out how they value your contribution and where your job could go,” he says. “You’ve got to be brave enough to ask some questions and if you don’t like the answers then you have to develop a strategy or change jobs if you are prepared to go through the job-seeking process.”
For those that do reach the salary negotiation with their current employer, Mr Greaves says there is no point in asking for less than 5 per cent.
“However, this can only really have any chance of success if you can identify where you add value to the business (preferably you can put a monetary value on it), or you can point to a sustained contribution above the call of duty or to other achievements you think your employer will value.”
THE%20SPECS
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Bombshell
Director: Jay Roach
Stars: Nicole Kidman, Charlize Theron, Margot Robbie
Four out of five stars
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The Details
Kabir Singh
Produced by: Cinestaan Studios, T-Series
Directed by: Sandeep Reddy Vanga
Starring: Shahid Kapoor, Kiara Advani, Suresh Oberoi, Soham Majumdar, Arjun Pahwa
Rating: 2.5/5
The specs: 2018 Mazda CX-5
Price, base / as tested: Dh89,000 / Dh130,000
Engine: 2.5-litre four-cylinder
Power: 188hp @ 6,000rpm
Torque: 251Nm @ 4,000rpm
Transmission: Six-speed automatic
Fuel consumption, combined: 7.1L / 100km
Gothia Cup 2025
4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
SPECS
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Where to Find Me by Alba Arikha
Alma Books
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
PROFILE OF SWVL
Started: April 2017
Founders: Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh
Based: Cairo, Egypt
Sector: transport
Size: 450 employees
Investment: approximately $80 million
Investors include: Dubai’s Beco Capital, US’s Endeavor Catalyst, China’s MSA, Egypt’s Sawari Ventures, Sweden’s Vostok New Ventures, Property Finder CEO Michael Lahyani
UAE currency: the story behind the money in your pockets
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants
UAE currency: the story behind the money in your pockets
What went into the film
25 visual effects (VFX) studios
2,150 VFX shots in a film with 2,500 shots
1,000 VFX artists
3,000 technicians
10 Concept artists, 25 3D designers
New sound technology, named 4D SRL
Brief scores:
Toss: Pakhtunkhwa Zalmi, chose to field
Environment Agency: 193-3 (20 ov)
Ikhlaq 76 not out, Khaliya 58, Ahsan 55
Pakhtunkhwa Zalmi: 194-2 (18.3 ov)
Afridi 95 not out, Sajid 55, Rizwan 36 not out
Result: Pakhtunkhwa won by 8 wickets
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
How being social media savvy can improve your well being
Next time when procastinating online remember that you can save thousands on paying for a personal trainer and a gym membership simply by watching YouTube videos and keeping up with the latest health tips and trends.
As social media apps are becoming more and more consumed by health experts and nutritionists who are using it to awareness and encourage patients to engage in physical activity.
Elizabeth Watson, a personal trainer from Stay Fit gym in Abu Dhabi suggests that “individuals can use social media as a means of keeping fit, there are a lot of great exercises you can do and train from experts at home just by watching videos on YouTube”.
Norlyn Torrena, a clinical nutritionist from Burjeel Hospital advises her clients to be more technologically active “most of my clients are so engaged with their phones that I advise them to download applications that offer health related services”.
Torrena said that “most people believe that dieting and keeping fit is boring”.
However, by using social media apps keeping fit means that people are “modern and are kept up to date with the latest heath tips and trends”.
“It can be a guide to a healthy lifestyle and exercise if used in the correct way, so I really encourage my clients to download health applications” said Mrs Torrena.
People can also connect with each other and exchange “tips and notes, it’s extremely healthy and fun”.
T10 Cricket League
Sharjah Cricket Stadium
December 14- 17
6pm, Opening ceremony, followed by:
Bengal Tigers v Kerala Kings
Maratha Arabians v Pakhtoons
Tickets available online at q-tickets.com/t10
