Crises, Prolonged War, Sectoral Growth Opportunities

• Published in: Journal of applied economics and business research Vol. 13; no. 1
• Main Author: Berggren, Christian
• Format: Journal Article
• Language: English
• Published: 2023
• Subjects: Crises; defense industry; Green Energy; pharmaceutical industry; prolonged war; sectoral growth opportunities
• ISSN: 1927-033X; 1927-033X
• DOI: 10.13140/RG.2.2.34678.27207

Starting with a discussion of the contradictory trends shaping the global economy in the 2020s, this essay focuses on three technology-intensive sectors: defense, pharmaceuticals, and energy. In the defense sector, the Russian-Ukraine war and the tensions in East Asia ended a long period of slow growth with a ´call to arms´ and rearmament across OECD. The challenge of the Western industries now is to accelerate output and capacity in a broad range of sub-sectors and support the safe supply of weapons and spare parts to the Ukrainian army. Thus, RUW is also a battle between different skills in management, logistics, leadership, and training systems, which offers a rich arena for future research in these fields.  In the pharmaceutical sector, the Covid-19 outbreak initiated another call to arms, and the industry was quick to respond by rapidly delivering new, effective vaccines. This coincided with a breakthrough for new approaches to cancer treatment, with a potential for major public health benefits, if the industry can handle the side effects and policymakers design cost-effective delivery systems with wide coverage. Again, this calls for focused research in the fields of management, innovation studies, and economics.  The third sector discussed in this essay, electricity production, was caught in a perfect storm by the outbreak of the new war. However, the net effect seems to be a major increase in investments in renewables. This creates new challenges regarding, for example, system stability, combinations of flexible and nuclear-based power sources, and the cost-effective diffusion of renewables to emerging economies, thus another arena for important future research.