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A Decade of Innovation in 1 Year: The Pandemic’s Packaging Impact

A Decade of Innovation in 1 Year: The Pandemic’s Packaging Impact

The year 2020 is ingrained in our minds and some changes will stick. The pandemic gave the world the unique chance to cram a decade worth of innovation into a year. For our industry, the pandemic’s packaging impact is also likely to linger.

Companies all around the world had the choice to adapt or halt operations. We learned what was necessary and what was not. Essential businesses kept the world running, and we are proud to be part of that group (more on our covid-19 update here).

But without lockdowns and travel bans, what would the world have looked like this decade?  If the pandemic had not happened, would grocery delivery services be as successful? Would video calls still be our method of communication? How would supply chains and economic markets have changed heading into a new decade?

The answers may surprise you.

2020 What Happened to the Economy

In 2020, e-commerce rose by 44%, meaning more warehouses and websites but fewer storefronts. Since 2010, e-commerce has grown between 0.8%-1.5% per year. After 2020 e-commerce has amassed a whopping 21.3% of all retail transactions. The industry wasn’t predicted to reach that level until 2024, an incredible 4 years of growth in only 8 months!

Material and labor shortages throughout the last year have shown how quickly the economy is changing. Warehousing’s CAGR (Compounding annual growth rate) in 2020 was 1.8%; where nationally it is only 1.4%. Essentially warehouse growth is outpacing the entire economy. And while the warehouse space in the USA had added 13.6 Billion square feet since 2015, the industry is poised to march out of the pandemic with a dizzying CAGR of 10% year after year until 2032!

How will today’s companies adapt to the reality that the 4th industrial revolution came early?

The answer is automation. The stability, reliability and increased productivity speak for themselves. By combining today’s changing workforce with the latest in technology, companies can protect themselves and their customers. 

The world of 2030 is in 2021

CNBC ran a story in June 2020 that predicted by 2024 e-commerce will reach 18.1%. However, as we’ve already talked about, e-commerce reached 21.3% in 2020.

Leading economists predict that the US is short 100 million square feet of cold storage space and over 1 Billion square feet of warehouse space. To meet this demand, zoning laws changed in some areas, allowing logistics centers to operate in old retail space. But there are still scalability challenges and these operations need innovative automation solutions that can keep up. 

The changing Face of Work

A decade that threatened to be filled with shuttered buildings has led to a remarkable transformation. Logistics and warehousing have helped fill the void. 

In 2011, The Review of Economics and Statistics reported that by 2030, about 400 million jobs would be fully automated. Also, approximately 75 million workers would receive training on how to operate new automation techniques worldwide. Out of these figures, 73 million of these jobs exist in the USA. But this is what economists thought before COVID struck. So what is the real story?

Today, we find that the economy has made such a remarkable transition that there is actually a worker and material shortage. Increased productivity and demand fueled by automation and innovation has actually secured jobs across the country. This is great news for workers and for employers. 

With the threat of rising labor costs either with a minimum wage hike or worker shortage seemingly always close at hand companies will need to refine the process and increase output per employee. By eliminating redundant tasks through automation companies are finding that they are more competitive and can attract and train the labor necessary to maintain output. 2020 has proven that companies who automate actually provide job security and better training to their employees while improving productivity and reducing labor costs in relation to output. 

What 2030 would have looked like

Is it possible that 2020 saved the American worker? The data actually says “yes it did”. As companies adapted to the crisis they crammed long term plans into 3 months, 60 days, and even a single 1 month period. Companies who embraced automation and innovation educated workers while jumpstarting the future of entire industries. Automation and development in 2020 has made even struggling industries like Domestic Manufacturing into viable international contenders.  

At the start of 2020 both China and India were poised to overtake the US economy by 2028. Those models have been moved back to 2032, and now 2035. It is absolutely remarkable that the innovation and development that occurred in 2020 extended US economic superiority by 7 years. And the good news for American companies and workers is that some of the most at-risk industries like warehousing, and manufacturing are leading the charge through cost cutting automation and removing labor redundancies. 

The Takeaways:

Many of the shifts that the pandemic brought to the mainstream were already underway. It didn’t change the trajectory; it sped up the process. Because of the rapid rate of innovation companies have been forced to embrace and adapt to new technology that was years away from implementation. To maintain a competitive edge today’s companies must embrace productivity and automation to remain viable contenders as the pace of work is keeping up. The good news is that this innovation through automation is good for the consumer, the worker and the employer. 

We want to invite you to use Hughes as your partner through this continuously shifting economy. From our packaging equipment solutions to our experience in packaging, Hughes has the tools to help your business thrive throughout the next decade. Like you, we have built on what we learned and we are ready to help position your company for the bright future to come.

Contact a Hughes Packaging Expert