Whenever there is any crisis, any wars, any pandemics. What usually follows after is disruptions and innovations. COVID-19 has drastically impacted the economy well-being and how people respond to crisis. No one can predict with any confidence how long will it take for the economy to recover nor how will the economy recover and growth over the medium term.
However, it is fairly easy to say that people have changed the way they see hygiene, the way they work with technology and the way they interact.
COVID-19 is a fundamentally people-based crisis. In the immediate term, most people have began to show a lot more empathy than usual as the whole team is going through great uncertainties. In addition to an open communication platform as everything takes place online, there are more transparency and people are reporting better relationships with colleagues during the pandemic time than usual.
In about a month, most individuals have adopted and are used to working with WFH technologies including virtual meetings, cloud communication etc. It further pushes the digital transformation as with nowadays technology, the possibilities of remote work is proven feasible and functional. The new normal will involve more remote work not just in small-medium enterprise but corporates as well.
In a long term, corporate leaders will have to identify and support critical roles, in order to mitigate risk of potentially losing talent/having key personnel for an extended period of time. For example, managers invest more into employees in developing different skillsets and adopting a flatter corporate structure.
Surveillance technology was criticized by the westernized world that it invades privacy and is used as a political weapon against government’s opposition. For example, China.
Countries like The European Union, United States, South Korea have adopted surveillance system to track the movement of virus carriers and quarantine acts. Through credit card transactions, security cameras with facial identification technologies, and mobile tracking, the government is able to locate mobile user in real-time.
According to European Centre for Disease Prevention and Control Authorities have mentioned numerous times that these surveillance technology is being used to Monitor the spread and severity of the COVID in the population, whereas there is minimal to no regulations about how these data are going to be used.
Even though surveillance technology is yet not a fully-developed industry as most countries do not have an organized rounded surveillance system in place prior to the crisis. However, this going to be part of the new normal after the pandemic is over because the benefits of having access to all these datas could significant help containing any potential virus outbreak, criminal activities or even administrative jobs like urban planning and creating policies.
However, increased surveillance measures will be unlawful unless they can meet strict criteria. The governments must be able to show that measures implemented are provided for by law and are necessary, proportionate, time-bound, and that they are implemented with transparency and adequate oversight.
Keep this in mind that, most North Americans and Europeans have not fought any viruses in the last decade, unlike Asia countries with diseases like (H5M1, MERS, SARS etc. Therefore in the post-pandemic world, consumer behaviour is going to shift and this is going to last.
People are expected to turn to more immunity boosting, personal hygiene and nutrition products in the meanwhile public healthcare system needs to expand its capacity in order to avoid any shortage problems like this time.
Airplane companies’ business model is disrupted, governments are imposing a higher bar for air ventilation regulation and wider personal space for all seats especially for the economy section.
Retail and commercial real estate is going to be the primary and secondary victims of the virus as in-store sales has frozen and commercial real estate values have diminished. Retail companies are forced to keep up with its digital infrastructure development and in-store sales will not be as importance as it was back in the past. Therefore commercial real estate will face a lessen demand thus lessen market activities and lower values of the space.
In order to support local businesses and people who lost their income sources, the governments of all countries have imposed various stimulus with majority of them involved cash stimulus to encourage consumer spendings.
If we take a look back in the 2008, cash stimulus was not a thing and was never implemented as a stimulus to the economy. In contract, the Troubled Asset Relief Program (2008) imposed to inject $700 billion to financial institution and social security programs, with the objectives to stabilize the struggling financial system. In the latter half of 2009, in the Recovery Act, the Congress extended tax cuts and unemployment insurance to avoid worsening situations.
As money inflate over years, the $2 trillion package may worth more or less than $700 billion back then, also the coronavirus has done way more damage than the financial crisis or the SARs outbreak.
In Taiwan and Japan, their cash stimulus is delivered in a form of consumption credit whereas they are only applicable for food services, retail products and leisure services etc. Whereas in North America, for those people who invested the money into the stock market has not really done anything towards the economy which defeats the purpose of a fiscal stimulus policy.
The efficiency of the package is yet to be known, but people are worried about the repercussion of the effect with is the inflated economy, which could be chained to countries who pegged their dollars with US dollars as well.
Reliance on Private Companies
Another observable facts of what happened during the COVID-19 is that the United States government has been relying the private sectors to fight the virus. From GE, LVMH manufacturing ventilator to Gilead initiating clinical trials to FANG companies making millions of donations. In short, it means we are relying on billionaires generosity to fight the virus.
China’s telecommunication giant Huawei has offered France 5g 20 billions of masks in exchange of a 5G contract (operator license) at France. Similar things could happen in the United States whereas industrial companies are asking for massive amount of money in exchange of their manufactured ventilators, for over 2000 dollars. Billionaires could have donated millions of dollars into the economy and ask the government for tax favours in exchange.
The lack of central control is a major downside of a democratic society, often times when the country is going through a tough time, government with no stakes in any manufacturing, healthcare, financial/commercial businesses could reduce their impact and ability to contain the problems as great as collective society.
However, the government could have induced greater control in the private sector by introducing more regulation and taxes to combat with the problem, although that will hurt the state of America’s current capitalism.