Like the 2008 global financial crisis, the COVID-19 pandemic is expected to accelerate economic and social changes that would have otherwise taken years to materialize
No matter how long it takes, the world will eventually beat this virus, and the global economies will recover from the punishing recession. But, once this is over, the pandemic will reshape the social and economic behavior permanently. Below listed are the most likely outcomes that might be witnessed:
E-commerce and digital services will make lasting gains
In the current lock-down scenario, the short-term winners are those who provide services and goods without coming in physical contact with the customers.
Winners in this category are the cloud computing providers (like AWS and Microsoft), the remote working services (like Zoom, Microsoft Teams, Slack), virtual reality companies (like Oculus), and the streaming services (like Netflix).
And, even when the economy eventually improves, these gains will mostly endure due to entrenched shifts in consumers’ buying behavior and habits.
The ad-spend will decrease
Social media traffic has soared higher than ever, but the advertising revenue is expected to suffer from weak demand in today’s crippled economy. Companies are pulling back their ad spend, and this will reverberate down to advertising agencies, production companies, and TV and radio stations. The most immediate impact of the pandemic has been that businesses have had to manage recession by cutting down their ad spend considerably.
Remote work culture will become the default
The employees who are working from home as a necessity are experiencing a complete change in their working style, giving them greater flexibility to concentrate on other crucial aspects like up-skilling and cross-skilling. Many will find themselves as more comfortable and productive working remotely, and, once the crisis recedes, it might get hard and expensive for few firms to deny them that option. Also, some employees might misuse this option to take advantage of this new preference.
The remote working technology will improve to enable the sort of mingling which previously required in-person meetings. Coupled with stricter travel restrictions for foreigners entering certain countries, industries reliant on business travel might feel the strain. This will push the need for remote working further.
The need for automation
This pandemic has served as an eye-opener from firms who now realize how crucial automation is for business continuity and survival in such emergencies. Also, to survive the crisis, businesses will need to lay off the least-productive workers and automate processes instead.
Restricted movement of goods across national and regional borders
Post pandemic, countries will retreat, borders will be less porous, and international trade will largely slump. To bolster the ability to survive economic self-isolation for extended periods, governments will push hard to strengthen their domestic manufacturing capacity by injecting adequate redundancy in the critical supply chains.
The coronavirus situation will accelerate the trend of corporations favoring the resiliency of domestic centralized supply chains over efficient global ones. Governments will conduct widespread and more intrusive surveillance to claim broader authority for monitoring and to respond to viral threats. Such conscious efforts will create significant friction for business travelers. As a result, the hospitality, airlines, and tourism industry will experience a severe demand slump.
International multilateral cooperation may flourish
After a period of initial retreat from globalization, nations might recognize that viral and technological threats are existential. In order to fight them, international cooperation is a must. Adopting a holistic sense of pragmatic internationalism, nations would develop new international norms, stricter monitoring and reporting systems, and better-coordinated response with well-tested contingency plans.
Whenever the next similar pandemic strikes, the global reporting and monitoring systems would detect and control it much faster. A coordinated global response would make self-isolation orders effective, shortening the economic shutdown and hopefully sparing lives.