Life Beyond COVID19 — Embracing the New Normal
We the Homo Sapiens are the alpha species of this planet and probably among the entire universe as we know today. We have withered many storms and major calamities for ages, be it from nature or man-made like World Wars and have always come out strong. Current pandemic COVID-19 is surely the biggest we have faced in last 100 years and practically none of us humans currently alive have seen any of this in our lifetimes.
Its quite certain that this time too we will be able to conquer this fatal epidemic with advancements in science and global collective efforts. But the key question we need to ask ourselves at this critical point is, have we taken our resilience to any catastrophe for-granted? Also, for how long we will continue to plunder our natural resources and sit on these self-made time bombs believing that we will always recover if and when they explode?
Well of course these are not new questions and not that these are raised for the first time. But surely these are not normal times also and while we are fighting the biggest challenge facing humanity, we must reflect on what kind of life we want for us and for our future generations once we have conquered this battle. We had gotten so used to living our mundane fast paced lives that we never questioned the status quo. We should take this opportunity, when everything has almost literally come to a standstill, to visualise about how and what different we should do to make that pivotal change in the direction we are progressing. Think of this situation as a reboot of computer system, an opportunity to decide if we want to go back exactly where we were or start afresh for a better future of mankind.
Well only time will tell if we did pivot or not but there are many apparent changes which will surely happen in immediate future impacting each of us in some or the other form. It is undeniable that there will be major structural changes to the way we live, work and play and this will become ‘The New Normal’.
Changes at Economic level
Overall, there has been a huge impact on the world economy and we are almost at the verge of entering into a recessionary phase if things do not start improving soon. Even prior to COVID-19, world economy was facing turbulence with many key economies reporting declining GDP growth for multiple quarters and trade flow disruptions. COVID-19 has further aggravated the situation with both demand and supply shocks due to shutdown of all economic activities in lockdown including liquidity constraints on the global economy.
With over 2 million people infected and counting, current COVID-19 is surely going to be the worst economic crisis after great depression of 1929 if not more. Global economic recovery will depend a lot on how fast US and Chinese economies bounce back. Bad news is that situation in US is yet to stabilise but good news is that now China has managed to curb the spread and not many new COVID-19 cases being. To put things in perspective, here are some facts about Chinese economy and how it influences the world.
- China contributes up to 16% of global GDP.
- China today plays the most significant role and lions share in the global trade and supply chain including shipping/transport network.
- China’s debt has grown maximum by 300% in last 10 years to USD21 trillion among emerging economies which will make it a case of ‘U’ shaped recovery than ‘V’ shape recovery.
Globally, from an individual industry perspective, there would be both immediate losers and gainers due to obvious turn of events and current dynamics of demand and supply.
Industries having positive impact in short term:
- Pharmaceutical and support equipment manufacturers
- Personal health care and ancillary to medical supplies and services
- ICT sector lead by Health tech, Edu-tech, Fintech, Mar-tech, cloud storage
- Broadcast and electronic media
- Online collaboration and content delivery (education, streaming)
- Telecommunications and connectivity providers
Industries having negative impact in short term:
- Aviation and maritime
- Travel and tourism
- Real estate
- Manufacturing of non-essentials goods
- Financial sector including core banking
- Hospitality including offline entertainment and recreation
- Oil and gas and including allied industries
- Sporting events and sports goods
While companies and organisations across the globe are working to comprehend the scale and impact of this pandemic, the challenges and opportunities that have now come up will force everyone to question the fundamental assumptions and use a different lens going forward.
Major Strategic Shifts in business landscape expected globally:
- Digitization all across: Digital transformation was already a buzz word in every industry and experiments were already happening if not a full-fledged adoption. COVID-19 will bring digitization from future boardroom strategy discussions to immediate ground implementation on priority basis. Technologies like cloud, data analytics AI, cyber security will get much needed investment impetus.
- Business agility and supply chain resilience: Frequent occurrence of these black swan events will force companies to not just built agile processes but embrace agility in their cultures and thinking to be prepared for any such eventuality. As supply chains are the backbone so companies will try to build their resilience in such unforeseen events to ensure minimal impact to business operations.
- Redefine cost models: In the current crisis, a key learning has been to keep the cost models variable. Going forward companies will evaluate hard before going for fixed investments where alternates are available.
- Reducing global dependence: Frequent changing geo political dynamics and global recessionary climate will force organisations and countries to push for localization. This will be more prevalent with essentials and strategically important sectors.
- Revisiting leverage strategy: Companies which are not heavily leveraged will find it comparatively easier to navigate through this turbulence as compared to those which have huge debt burden. This will reinforce the age-old advice for conserving cash reserves and financial prudence.
Changes to Society at Large
While the world is still fighting this apocalypse, where some countries managed to put measures in place and curb the community spread while others have suffered immensely and still counting, the battle is far from over yet. With ‘social distancing’ and PPE (personal protective equipment) being the buzz word and rightly so, we will see momentous changes in how people go about with their daily lives.
The repercussions of this future defining event are far more profound and will paint a blatantly different picture on the social canvas that binds the society at large.
Avoiding public places and community outings
There will be fewer public gatherings and community meetings and even family functions and religious ceremonies will not be of the same magnitude. Though the extent of social distance compliance would vary from person to person but people generally would limit their public exposure to non-avoidable and important meetings only. Sports events, Cinema halls, Shopping malls and even public transport usage will decline and people will look for safety measures and arrangements before availing any of these.
Impetus to Work From Home and Gender Equality
Work from home will gain mass acceptance as companies which were reluctant to adopt this model earlier will give more than welcoming as now, they have seen the proof-of-concept. This will also pave way for improvement in gender gap at work places. Women who earlier used to take break from their professional career after marriage as they had to take care of young kids will get option to continue their jobs as work from home options will be available more generously and become mainstream.
Hygiene practices will gain importance across cultures
Many developing countries like India which were pushing for social campaigns like “Clean India” will get a shot in the arm as now they will have acceptance at the ground level which is very important for success of any social campaign. General hygiene habits of people will improve many fold and education institutes will play a key role in disseminating knowledge at the grass root level with more rigour. Use of PPEs like masks and gloves will become fashion statement and endorsed by fashionistas and celebrities.
Booster shots for Fintech and Ecommerce in developing economies
With social distancing being the new norm, we will see soaring demand for ecommerce in products and places which were laggards earlier. Fintech and online payments will reach new heights as people would avoid dealing in cash for hygiene purpose and also to enable ecommerce transactions. Latest deal of Facebook with Reliance Jio, India in April 2020 to enable online payments for small retailers couldn’t have been at a better time. Though it has been works for sometime but now they would have ready acceptability in the market from retailers and customers.
Global support for Green alternatives and Vegan movement
Vegan movement world over will see a new lease of life with great adoption and more and more people advocating vegetarian food. Many suspect that COVID-19 virus entered human chain via bats from a live stock market in China. Now even China has declared dogs and cats to be treated as pets and prohibited to be used as livestock.
One of the positive aspects of this pandemic for society is that everyone could experience a pollution free environment due to complete lockdown in most of the countries. Not many people get the opportunity to travel across the world and experience a cleaner environment for themselves as it varies big time among countries. We will see a renewed support and demand for green alternatives as the society gets back to their routine life.
Changes to Governance and Individuals
Governments across countries will move fast to restore economic balance displaced by forced lockdown while keeping the tenets of ‘social distancing’ alive. Apart from special relief packages across industries and to sections of society, there will also be efforts to put in place a disaster management policy and contingency fund to meet such eventualities in future. There would be efforts to put in place drone-based surveillance for situations like forced lockdown and to ensure compliance.
One of the major issues many countries faced was tracking the travel history of its citizens to take precautionary quarantine measures. To this end, officials across all countries should collaborate to introduce a global tracking system for international travellers, something like e-passport.
Though quality of government healthcare and education facilities vary across countries but they do not have the level of digitization and online facilities as private sector. There will be major impetus from governments across to digitize and impart via online channels especially developing countries.
As I mentioned initially, this is not just another event in the history of mankind but a life defining one and changes will be far more conspicuous for some individuals immediately and for others little late as the dust settles down.
How each individual embraces this change will vary as there will be millions of infected but recovered individuals and their family members, then there will be millions who would look for alternative means for livelihood due to mass unemployment. Many will look to reskill themselves due to changes in economic environment as discussed above.
While we all know COVID-19 will go down as a black spot in the history of mankind, but as they say there is always a silver lining to every cloud and even a stopped clock is right twice a day, we should take this as a stepping stone in our journey, embrace the new normal, and walk towards a better and brighter future.
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