AV forecast for 2023

• Features

• 21/02/2023

It has been ‘all hands on deck’ for the AV industry for a couple of years as the global market oscillated between disruption and progress. AV has been at the forefront helping businesses continue operations during the pandemic and now powering the surge of hybrid work, live events, attractions and more.

Taking stock of where we are and figuring out what needs to be done, we speak to professionals in the know about developments in the corporate sector, the allure of attractions and spectacles, and the supply chain and product shortages.

It’s a party

Not surprisingly there is renewed interest from patrons in events, attractions, and spectacles. Adrian Goh, group managing director at Hexogon Solution, puts the boom in context: “There has been a rush of events as everything opens up and the tempo has definitely been high. For the foreseeable future we are expecting events to surpass the pre-pandemic levels. Clients have been pumping extra budget into events and what this has done is that there has been an impact on supply.”

He continues: “But this pace of events is unsustainable in my opinion. There are elements of pent-up demand being realised, perhaps a bit too much enthusiasm on the part of clients and high demand for events from patrons. I think the rate of growth for events will drop probably to a more progressive and sustainable point in the coming year, because at present it is a little bit too fast.”

While we wait for the market to cool off, the challenge for the events industry is to deliver on the increased demand. This is easier said than done because talent left the industry during the pandemic as events ground to a halt. Is this talent returning?

Goh answers: “Talent falls into two categories. One is the people who have left the events industry for good. Perhaps they found work that is suitable for them, we have a lot of talent with transferrable skills that moved to the fixed installation business for example, and they are happy with the change in lifestyle. This category of talent is unlikely to return to the events industry.”

He continues: “But the second category is the people who have a passion for events. For them, it’s not just a job. And while talent from this category might have left the events industry during the pandemic due to the challenges we faced, I believe that their passion is going to drive them back to the industry.”

Goh advises caution for those looking to swell their ranks: “Right now, we’re in a very difficult scenario where we need professionals to meet the increased demand for events in the market and this is resulting in people increasing wages and compensation packages to attract talent and combat the shortage of manpower. But it’s tricky because as I said previously, the increased demand right now might normalise in the second half of the year as the market cools down. So, we are torn between spending and hiring to meet the immediate demand for events, but we also need to be prudent for the long term.”

On the technology front, Goh elaborates: “Projection mapping remains the key for the events that we are doing, and I don’t see that changing anytime soon. Sure, we shifted to XR, virtual reality and experimented with other mediums as we adapted during the pandemic, but as things are opening up events have swung back heavily in favour of in-person experiences. As things normalise, I think we will look at how the experiments from the pandemic can be included into our events offerings, but I believe they will be a ‘value add’ to events in the future.”

Making hybrid work

Videoconferencing is a mission-critical component and Microsoft Teams has become the de facto VC platform of choice across the corporate sector. Seeing that VC is not leaving anytime soon, and Teams continues to increase in popularity, insight from Microsoft on how things will unfold in 2023 can signpost a way forward for AV.

Rosalind Quek, general manager, Modern Work, Microsoft Asia, says that hybrid work is still not fully figured out and there is still work to be done: “Several months into hybrid work, employees and employers are divided and not everyone agrees on how it’s going. Employees have embraced flexible work and its benefits and are rejecting a return to hustle culture. At the same time, many leaders yearn for the office life of 2019.”

She continues: “In a hybrid world, companies need a new, modern approach to engaging employees, and tech plays a critical role. We recognised that hybrid isn't just one thing – it is people working remotely, from the office, on their mobile device, and all manner of combinations of those. Microsoft is committed to delivering new ways to help leaders drive clarity and alignment, eliminate time wasting busy work, and determine what is getting in the way of their employees making a real impact. We’ve always focused on delivering tools for productivity and collaboration, and now it’s about going beyond productivity and collaboration to focus on people’s success.”

According to Quek what we expect from work and workplaces is changing. She elaborates: “Microsoft’s Work Trend Index’s data shows that people come in for each other to recapture what they miss: the social connection of being with other people. People now expect flexibility and autonomy around how, when, and where they work. They want to come in for their work friends and teammates, but at the same time, they want to be able to participate online. The office can’t be the only answer—technology plays a critical role in creating connection wherever, whenever, and however people work.”

In particular, Quek believes that tech needs to enrich the digital component of hybrid work. She says: “In a hybrid workplace, there is the need to create a digital community with modern communication tools to fuel conversation, empower people to express themselves, and connect leadership and employees, while using in-person time to help employees rebuild team bonds and networks.”

She advises: “We need to be intentional about what technology needs to be in what kind of space. A test and learn approach can be beneficial for organisations who are evolving to meet new expectations.” Quek concludes: “The changes that swept the work world over the last few years are not temporary. They are here to stay. Going into 2023, one thing is clear: energised, empowered employees are what will give organisations a competitive edge in an uncertain business environment."

Got product?

Product shortages have replaced pandemic induced restrictions as the number one challenge integrators are facing as they deliver projects for their clients. It is the main disruptive factor in the market and we investigate whether the challenges will persist.

Sean Tobin, APAC chief operating officer at Midwich, gives a recap of where we find ourselves with regards to the AV supply chain, logistics and delivery: “The first half of 2022 was amazingly challenging from a logistics and operational perspective. Countries across Asia Pacific were coming out of Covid-19 lockdowns, restrictions were fluid and there were specific challenges in some countries, such as the fires and floods in Australia which had a huge impact on day-to-day logistical operations.”

Tobin continues: “And across APAC, the ‘product shortage’ has been compounded by the fact that pent-up demand and delayed projects from the Covid-19 period need to be addressed as well as the fact that the manpower and labour resources market has been uncertain.”

However, things are turning a corner as Tobin says: “The second half of 2022, especially the last three months, saw operations get back on track. Labour markets are stabilising, projects are getting deployed at a rapid pace and stock is moving. It has been the busiest it has ever been at Midwich for the last two years. There has definitely been a positive swing in momentum.”

The question then becomes, will this momentum continue? Tobin answers: “We’ve had false starts in markets through the pandemic and demand planning has been hard for everyone. On the manufacturer side, it was difficult to determine how much component stockpiling they should undertake and how much they should hedge against risk. Manufacturing is like a tap that is difficult to turn. This tap was turned off and manufacturing was reduced during the pandemic, but demand didn’t fall as much as predicted. Some markets came back quicker than others. The process of turning this tap back on and getting manufacturing on track to meet demand is a slow process and that has a knock-on effect for product supply. Add to this the fact that APAC doesn’t really have centralised distribution and you have the long product delivery times that integrators are battling today.”

Tobin continues: “But I think we are back to the normal rhythms of business. We’ve gone through a period of challenges, and we’ve adapted to respond to the challenges. There is a much clearer idea regarding the projects that are coming in and the projects that are on the horizon and this allows for robust forecasting and demand planning.”

Tobin also believes that a portion of the challenges caused by supply chain and logistics can be mitigated if integrators have the right partners. He says: “We’re a value-added, trade only distributor and it is our job to stay on top of forecasting and demand planning. We see the value in putting and growing resources in country, having ready and available stock in country and developing partnerships that benefit the entire AV chain. We have both local and global relationships with vendors that we can leverage to insulate our partners from the shock of product shortages and delivery lead times and much more.”

Tobin concludes: “To be honest, the industry should be running out of excuses in some ways whether it is Covid-19, chip shortage, labour issues or something else. We’re seeing these challenges be overcome, the pressure be released, and we are seeing our business, especially in Southeast Asia, growing. We’re looking at 2023 with optimism and positivity.”