More than 20,000 deaths and 450,000 infected people globally in less than four months. Airports, factories, cities and countries locked down to cope with an infectious disease. However, this too shall pass… and then...
A shock of this scale will create a discontinuous shift in the preferences of individuals as citizens, employees and customers. It will have an impact on how we live, how we work and how we use technology and much more. Watch out - there will be an imminent change in the world economic order.
Economic activity will take a long time to pick up. Indian corporates who acquired companies overseas at high multiples will take a long time to recover, if at all. Excessive dependence on China will end and the world will explore other supply chain opportunities. It could well be the end of supply chain globalisation also as opportunities for domestic manufacturing industries get a push. The use of digitisation will increase exponentially. Travel overseas will reduce. Board and other business meetings will happen more frequently on video conferencing. Use of Zoom will, therefore, boom. The online world of contactless commerce will reshape consumer behaviour forever. People will find new ways to connect and support each other in adversity. Shopping experiences will increasingly move online. Even the customer segments at the bottom of the pyramid may also opt for online orders of vegetables and other provisions from outlets like Big Bazaar. Visits to malls where there can be exposure to masses will come down as suspicion or fear will continue to prevail.
What will be the future of eating out- and of restaurants? Going to movie theatres will likely come down and be slowly replaced by Netflix and Prime Video -- watching movies from the comfort of your home and at much less cost. Distance learning will gain ground even as perhaps there will be less emphasis on foreign universities such as Harvard or Wharton and greater dependence on homegrown management institutes.
This massive shift in individual behaviour will change the workplace too. The world’s largest businesses have already started to embrace the shift to remote working - work from home. The new culture of care and empathy that corporates will need to evolve in this environment would perhaps extend into the future. Employee protection and health care will top the agenda. And employee costs including pension and healthcare benefits may increase. As we move on from coronavirus, at a macro level, the world will need to redefine what constitutes a black swan event - from a risk perspective.
Global healthcare systems will also need to find ways to cope with rapid surges inpatient volumes and the need for critical medical equipment. The financial ecosystem will also need to contend with strengthening the system to withstand acute, global exogenous shocks such as this pandemic.
However, not all is clear. Will social distancing really become a new norm. Will touch become taboo? Will you recoil from shaking hands? Will Namaste as a way of greeting become India’s biggest export to the world? On the geopolitical front, will the rumours and suspicions around China’s role in the COVID-19 epidemic lead to a global boycott of China? Or will the world again crawl back to the manufacturing powerhouse once all this epidemic ends? And there is hope that a lesson will be learnt by India as a whole on hygiene and cleanliness. While Swacch Bharat and open defecation free (ODF) India may be good social initiatives with high impact, the reality on the ground is rudely different.
There is also hope that the Indian media continues with its good behaviour and not revert to spewing venom at individuals and political parties. Hopefully, if political parties take this virus as just revenge of Nature for their pettiness, then we will be able to focus on national solidarity. It is time to begin to promote more constructive patterns in our cultural and political discourse.PK Ghose is former executive director and CFO of Tata Chemicals and now a member of the CFO Board. The views expressed are personal.