The Coronavirus pandemic has shown how fragile the international system is, sparking shifts in alliances, governments, and the global economy.
In the years ahead, these changes may include China gradually presenting itself as an alternative to the United States on the world stage, and the removal of other countries , including the United States, from global organisations such as the World Health Organization.
Recoveries have always been important to economies. Some of the biggest shifts in market share occur because of downturns, when new industry leaders, and new industries are often emerging.
The post-Covid-19 world will accelerate some existing trends and create new ones, and all business models will have to evolve to grow and thrive. But there is no way to predict the coming year accurately, so it is a risky mistake to rely too heavily on predictions that are not complimented by highly adaptive factors.
The pandemic is set to shake up not only healthcare, but also politics and business, the economy and financial markets, culture and society, lifestyles, the use of technology, well-being, and the environment.
- Government Policies
Covid-19 has pushed governments to interfere in the economy and daily life in a way that is unparalleled in peacetime. Travel bans, lockdowns, quarantines, and social barriers intended to prevent the spread of infection have resulted in a high economic burden far beyond the direct costs to health care systems.
Once the imminent pandemic is over and the economy, like society, recovers, governments will have to find out how to divide the bill. Even while there will be demands for governments to step back, the argument for more assertive state action will remain.
It may call for a comprehensive analysis of how public and private investment works, including novel funding strategies, including equity participation, allowing governments to reap further benefits.
Populist politicians have used pandemic hysteria to pursue their nationalist agendas, pointing out the dangers of open borders and the security threats of undue reliance on foreign suppliers. The primacy of national interests has been seen in attempts to store essential medical resources, and the blame game has broken out, especially between the US and China.
It is hardly shocking, therefore, that there is a common perception that the Covid-19 pandemic would lead to more deglobalization and political division. This presents a long-term threat to international coordination, which could further damage trade and investment. But the long-term picture may look different.
3. Fiscal Policies
A further radical transformation of macro-economic policy is going to cast a long shadow. Despite fiscal laws set aside, coping with the enormous build-up of debt would be a major challenge.
The main issue is whether governments would continue to introduce more years of recession to pay off their pandemic debts with budget cuts and higher taxes. More radical choices can suddenly become true.
One would be to make the federal banks issue ‘helicopter money,’ maybe aimed at low-income groups. Such monetary financing would not add to government debt, helping with financial easing.
Another alternative would be for federal banks to launch digital currency to push interest rates far below zero and maybe make it time-bound to compel people to do so.
4. Healthcare Policies
Since the enormous cost of constantly shutting down economies to contain pandemics will not be sustainable, money must be redirected urgently to improve medical research and to invest in global health and safety efficiency.
The Covid-19 pandemic will certainly lead to the realisation that repeated pandemics are a serious threat.
Alongside this, major improvements will also be made in the health and education system. Insufficient critical care infrastructure in a variety of countries, including hospitals, supplies and staffing, has been impacted by the pandemic.
In addition, the health sector will also require more investment in tracking and research, public health awareness and fast communication. Telemedicine is also expected to be given a big boost as a cost-effective and easy way to access health care in circumstances where physical contact is unnecessary.
Meanwhile, the inadequacy of health systems in Africa and other parts of the developing world, which has gained little attention so far, will become a major global policy issue. This is likely to add urgency in addressing the full range of UN sustainable development objectives, given the correlation between environmental and economic vulnerability.
5. Service Industry
The weakness of the service sector has been recognised by the pandemic.
Recessions usually hit the manufacturing and real estate sectors especially hard, with consumer demand remaining stable and trade and investment declining. Nevertheless, in the event of this pandemic, control facilities involving social interaction, such as recreation, shopping, and travel, have been especially hard hit.
An important feature of the service industry is that none of the business lost during the pandemic can be recovered until it is over. As a result, several trips, sporting activities, holidays, and meals out will be largely foregone rather than merely deferred. Making it difficult for the businesses concerned to cover the additional debts they have accrued in the event of a pandemic.
Internationally, the pandemic has also revealed the vulnerability of emerging markets that have built up huge debts, most of it in US dollars, in recent years. The rapid removal of capital from these markets, combined with the economic difficulties of the pandemic, would certainly place many at risk of defaulting causing the Government to continue to interfere with the financial sector.
Given the reconstruction of the capital and liquidity reserves of the banking industry over the last decade, the extent of the downturn that force governments to bail out and restructure bankrupt banks and financial institutions. Regulations designed to tackle threats in individual organisations are not well tailored to the structural problems raised by the global crisis.
The pandemic has revealed the risks of over-optimizing systems and supply chains, leaving no space for unexpected setbacks.
To deal with future surprises, companies are likely to move from ‘just in time’ to ‘just in case’ where the expectation is that things do not always operate smoothly. This means building in bigger inventories and redundancy and flexibility in processes and systems.
Many businesses will rethink their reliance on Chinese manufacturing, not only from a geographical point of view but the climate of geopolitical antagonism would fuel a new trend towards global, regional, or even local self-sufficiency. The direct destruction of the pandemic has highlighted the need to protect vital resources such as food, medical supplies, and essential inputs and components.
Moreover, the social and cultural impact of the pandemic is likely to cause the growth of local networks and communities. In this regard, the rapid development of new technologies, such as 3D printing, that encourage the localization of output.
8. Consumer Behaviour
The mortal danger posed by social experiences during the global pandemic has led to drastic and complex shifts in person and collective behaviour. Even with the pandemic decline, the legacy of painful memories is likely to lead to a sustained shift in attitudes, norms, and behaviours.
On the one hand there has been widespread fear, selfish ness, and the sudden avoidance of physical encounters with strangers that ‘social distance’ is becoming the norm. On the other hand, there has also been a resurgence of group spirit and selfless altruism to help and defend families and neighbours.
Digital media has played an empowering role, but people’s new knowledge of their local communities, including impersonal urban areas, may well continue after the pandemic. A blunt reminder of the fragility of human life and our interdependence, and a recognition of the value of face-to-face interactions for our well-being, can contribute to more compassionate and community-oriented behaviour.
Growing understanding of our social experiences can contribute to improvements in the frequency and complexity of both physical and digital experiences. Within the physical world, the standard of experiences should be more highly regarded, maybe with more attention paid to established people, clubs, and immune confidence systems in the face of potential health threats. Throughout the digital world, creativity can also improve efficiency using VR and robot technology.
Pandemics can transform attitudes towards personal health monitoring and interactions with other people. Reconciling this with the defence of personal privacy, security and civil liberties would be a challenge in the West, where the Chinese government’s ability to monitor its people is regarded with scepticism.
However, people are willing to bargain for protection at the height of the pandemic and are likely to push back restrictions afterwards. These can be phased out, with periodic reversals depending on potential health risks. Quick test equipment can become pervasive in public buildings.
The pandemic is likely to lead to changes in data sharing processes and privacy regulations, especially in situations of crisis. In particular, the ability to monitor face-to-face social interactions with geo-spatial mobile technologies in real time would be invaluable in future epidemics.
The global Covid-19 pandemic is causing a terrible human toll and threatening the world economy. Across industries, companies should now act to protect their employees and customers — and now prepare for the world beyond Coronavirus.