Daily Times

Just a few weeks ago, all of us were living our usual busy lives. Now, things normally taken for granted-an evening with friends, the daily commute, a plane flight home-are no longer possible. Daily reports of increasing infections and deaths across the world raise our anxiety and, in cases of personal loss, plunge us into grief. There is uncertainty about tomorrow; about the health and safety of our families, friends, and loved ones; and about our ability to live the lives we love. In addition to the immediate concern about the very real impact on human lives, there is fear about the severe economic downturn that may result from a prolonged battle with the novel coronavirus.

It is impossible to know what will happen. But it is possible to consider the lessons of the past, both distant and recent, and on that basis, to think constructively about the future. We believe the following elements will be important in the shaping of the next normal-and that public policy makers and business leaders will need to come to terms with them.

Distance is back

In the mid-1990s, the idea of the “death of distance” gained considerable importance. The thinking was that new web based and telecom technologies had made it possible to communicate and work in new ways that dramatically reduced the value of physical proximity. As the flow of information became cheap and seamless, global supply chains of bewildering complexity were able to deliver just-in-time products as a matter of routine. Cross-border trade reached new peaks. And the world’s burgeoning middle class took to travel and tourism with something like abandon.

As the flow of information became cheap and seamless, global supply chains of bewildering complexity were able to deliver just-in-time products as a matter of routine

Such attitudes were far from universal, of course. But to deal with the pandemic, governments around the world have imposed restrictions on people and goods of a severity not seen for decades. According to one study, more than three billion people live in countries whose borders are now totally closed to nonresidents; 93 percent live in countries that have imposed new limits on entry because of the coronavirus. Eventually, the tourists will come back and the borders will reopen, but it is certainly possible that the previous status quo will not return.

Resilience & efficiency

Even when lockdown restrictions begin to ease, businesses will need to figure out how to operate in new ways. In short, resiliency-the ability to absorb a shock, and to come out of it better than the competition-will be the key to survival and long term prosperity. Again, the past can be a prelude. In 2008 financial crisis, it was found that a small group of companies in each sector outperformed their peers. They did get hurt, with revenues falling about the industry average, but they recovered much faster. By 2009, the earnings of the resilient companies had risen 10 percent, while that of the non-resilient had gone down almost 15 percent. What characterized the resilient companies was preparation before the crisis-they typically had stronger balance sheets- and effective action during it-specifically, their ability to cut operating costs.

Other key elements of business structure will also be revisited. For example, the Wall Street Journal observed that the crisis has revealed weaknesses in succession plans as leaders get sick and deputies quickly need to be found across all aspects of operations. Companies are learning the hard way that succession planning has to go much deeper than the C-suite, and much broader, responding to possible short-term disruptions as well.

The rise of the contact-free economy

In three areas in particular-digital commerce, tele-medicine, and automation-the COVID-19 pandemic is certainly proving to be a decisive turning point. E-commerce was already meaningfully and visibly eating into the sales of brick-and-mortar stores. What the coronavirus has done is to accelerate a change in shopping habits that was already well established. Early indications from China, for example, are that new customers and markets- specifically individuals aged 36 and over and residents of smaller, less prosperous cities-have begun to shop online in greater numbers.

The figures for tele-medicine and virtual health are just as striking. Teladoc Health, the largest US stand-alone telemedicine service, reported a 50 percent increase in service in the week ending April 20, and is adding thousands of doctors to its network. The Federal Communications Commission is spending $200 million to improve connectivity between patients and virtual-healthcare providers, and the US Department of Health and Human Services has increased reimbursements for telemedicine and enabled cross-state provision of virtual care. Sweden’s KRY International, one of Europe’s biggest tele-health providers, reported that registrations were up more than 200 percent. France and Korea have both changed regulations to ease access to telemedicine. With a vaccine or treatment at least months away, patients and healthcare providers both have reason to expand virtual interactions.

Greater automation was already occurring before COVID-19. In late 2017, the Economist estimated that 60 percent of all jobs could see more than 30 percent of their key tasks automated, affecting 400 million to 800 million jobs around the world by 2030. According to the RAND Corporation, over the three recessions that have occurred over the past 30 years, the pace of automation increased during each. In effect, it is becoming possible to imagine a world of business-from the factory floor to the individual consumer-in which human contact is minimized. But not eliminated: for many people, getting back to normal will include popping into stores again, and the roadside kiosks typical of much of the developing world are not about to be replaced by cashless hyper stores. Patients with complex needs will still want to see their doctors in person, and many kinds of jobs are not automatable. But the trends are unmistakable-and probably irreversible.

Another important factor which warrants global attention is about emerging interventionist role of the governments across both hemispheres in the context of post-Covid arena. It will be discussed in the second and concluding part of the article

(to be concluded).

Saud Bin Ahsen is an old Ravian, can be reached at saudzafar5@gmil.com