The Corona-pandemic has shaken the entire world and altered the way we live our lives, at least temporarily. The question is: how temporary is the current state we are in? Or rather how will our lives, society and world be altered and in what ways?
The immediate consequences we see so far are lockdowns, social distancing, an overwhelmed health care system, companies shifting to remote working models, gatherings being banned and borders closing.
The events caused by the pandemic are still unfolding and the many variables make it inherently complex to predict the outcomes. Will things go back to normal or will they forever change? Predicting the future is impossible but it is possible to see some early indications of trends that are emerging. In this blogpost, we will focus on three areas that we see will be impacted and present a couple of trends regarding each area:
1. A changed perspective on globalization
Since mid 20th century we´ve seen an increased interconnectedness thanks to the rapid advances in transportation and technology which have had a positive impact on global trade and cultural exchange. We live in a society where it’s easy to ship goods across the world and where it’s possible, and even considered natural, to work, move and travel abroad.
While globalization indeed has helped raise incomes, rapidly develop economies and increase production of goods and services – it has also helped increase the risks of contagion, both medical and financial. The spread of Covid-19 has been accelerated by the global interconnectedness, and our reliance on globalized value chains makes us vulnerable to the effects of the crisis. Will these downsides start to change our previously positive view of the free global movement?
1.1 Monitoring and controlling the free movement
In order to prevent future pandemics, traveling will likely come with further safety measures using methods that could have implications on traveller's privacy. We have already seen examples of nations using technology to monitor and track contagion within the population. One example is China that has used monitoring systems to identify suspected coronavirus carriers but also to reinforce quarantine behaviours, using e.g. smartphone location, face-recognition, reporting of body-temperature and medical conditions. Other countries that have used similar solutions are Taiwan, Israel and Hungary.
We may see an upcoming increase in implementation of such solutions after the crisis, in efforts to try to avoid further pandemics. For instance, Apple and Google recently announced a collaboration with purpose of providing tools that will help track the spread of coronavirus. In the future we might start seeing tech solutions for checking medical health at airport security checkpoints, or we may need to verify our “health status” using biometric bracelets or medical apps on our smartphone, before we enter a country or a public space.
1.2 From lean and globalized value-chains to buffers and backups
Companies have become more and more efficient in their production processes and many have perfected decentralized global value-chains. A lot of companies rely on collaborations and partnerships with a network of global suppliers and these setups have in many ways been greatly beneficial for companies. Notable examples are Apple that has over 200 suppliers around the world and several car manufacturers, like Volvo, Hyundai and Fiat that are dependent on components that are made in China – all companies that now have suffered from halted production. China represents 16% of the global GDP and US represents 23%, making the whole world dependent on what happens in the Chinese and American economy.
We will probably see different production setups arising with an increase in safety buffers and a greater diversification of the supply chain.
We have recently experienced the downsides and risks of global supply chains and it has become quite evident that many organisations lack backup solutions and don’t have storage or buffers to rely upon to help them overcome temporary issues in the value chain. It is likely that we will see altered strategies after the Corona crisis, where organisations will begin to plan for handling another crisis or pandemic. It is not likely that we will see companies completely abandoning global value chains, since the benefits are still there, but we will probably see different production setups arising with an increase in safety buffers and a greater diversification of the supply chain.
1.3 Increased international collaboration and cooperation
The effects of the Covid-19 outbreak demonstrate how unprepared we are to handle such a pandemic on the international level. To successfully contain the spread of the virus, international collaboration and cooperation is necessary. Previous outbreaks such as Ebola in West Africa, or SARS and MERS have served as warnings, but did not result in enough international action. This time, things are different.
Although we have seen increased protectionism during the last years, it’s possible that this pandemic will acknowledge our interconnectedness and spur efforts to work together more closely.
We can learn from our collective experiences and use that knowledge to increase our preparedness for future crises. Isolation is a key component in containing the spread of a virus, but it’s not the best way forward when preparing for future, global events.
2. Shifting societal priorities and strengthening the healthcare system
This pandemic has revealed how vulnerable our societies are and the importance of robust healthcare systems with sufficient resources. The fast spread of the Corona virus has forced nations to put everyday life on pause and is putting increased stress on our societal abilities to cope with the spread of the virus.
2.1 A strengthened healthcare system
The pandemic has put our fundamental societal structures to a test, and in the aftermath, we may see a re-prioritization of resources. How can we make sure that we are better prepared for a global crisis such as Covid-19? And how can governments guarantee an effective health care?
Preparedness for crisis
It’s now obvious that most countries have not prepared for a pandemic such as Covid-19. The prime minister of Sweden – Stefan Löfven - recently acknowledged that our preparations have not been adequate. During the last thirty years, Sweden has deliberately disposed of medical supplies and equipment which would have been valuable today. We believe that this pandemic offers a rapid awakening regarding the consequences of the unexpected. Hopefully, we will learn from this experience and make sure that we prepare for future crises, not least within the healthcare system.
Resources and management
Our healthcare systems have been put under great stress for many years. We believe that after the crisis there will be a healthy and necessary discussion in Sweden regarding the resources allocated to the healthcare system. There is much to be done, not least ensuring that there are sufficient medical personnel available also in times of crisis. Hopefully, we will also see a shift in how the healthcare system is managed with less politicization.
2.2 The rise of self-help health care tech
We have already begun to see an accelerated adoption of “digital doctor” services since the pandemic started. The Swedish telehealth solution Doktor.se reports that the number of cases has doubled as a result of covid-19, a trend that other telehealth solution providers note as well. The increased adoption is seen largely in the older age groups as they, due to safety reasons, should avoid visiting hospitals.
The limitations in the traditional physical health care forces an increased adoption of new digital solutions and it empowers people to take personal control of their own health care. This drives up the demand for effective home diagnostics tools, telehealth solutions and other solutions that extend the reach of the healthcare professionals. We will likely see an increase in innovation and adoption of such solutions that will enable the individual to take a greater role in their own health care, even after the pandemic.
2.3 Healthcare efficiency enabled through AI and faster innovation
AI is already having a big impact within the healthcare sector, and it will likely play an even greater role in transforming medical procedures after the Corona crisis.
AI could support in making more accurate diagnoses, mass diagnosing conditions and be used to speed up the development of pharmaceuticals. AI can also help improve the patient experience and automate hospital processes.
We therefore see an increased demand of AI solutions as they enable efficient healthcare and improves nations capability to battle future virus outbreaks. The health care sector has, compared to other industries, been slow atembracing tech innovation and entrepreneurship. A possible result of this crisis could be that technological development, innovation and entrepreneurship within the health-care sector could be boosted and receive more resources going forward.
3. The future of employment
With the spread of covid-19, came also an economic crisis resulting in bankruptcies and mass unemployment. According to Forbes, the number of layoffs in USA could reach 47 million in June 2020, which would lead to an unemployment rate of 32.1%, higher than the great depression´s worst rate of 24.9%. In Sweden, 36,800 people have been laid-off during March 2020 which is 10 times the numbers from March 2019. The Swedish minister of finance Magdalena Andersson recently presented a report estimating that unemployment would reach 9-13.5%. We can also see how lockdowns and recommended social distancing, to battle the spread of the virus, has impacted schools and workplaces where many are nowadays working from home if possible. We see these events as important change indicators for the future of employment.
3.1 Gig-Economy providing the job opportunities
The gig-economy has during the past years emerged and grown more common thanks to the larger number of freelance- and gig-platforms available in a wider area of industries. The overall shift to a more gig-oriented job market has not yet been fully carried out, where one of the main challenges for the gig-movement is the perceived lack of employment security that the work form entails.
Due to the coronavirus we are unfortunately seeing unemployment rates reaching record numbers and finding a permanent position during these times can be difficult. It is quite possible that many, whom prior to the mass-unemployment rate have been unwilling to take gig-jobs, will need or even prefer to make the move into gig-economy. The shift to gig-work may either be of necessity, opportunity or due to a shifted perception of job security and the trend will likely be more common with younger professionals, within tech and consulting professions.
Short term we will see an increase in the number of job seekers, but eventually employers will slowly be able to engage in lighter investments again, resulting in more job-opportunities. The immediate resource needs in society due to lock-down are within delivery, health sector and e-commerce, however the future might create new job opportunities, as we will need to increase our crisis-mode capabilities both within organisations but also on a governmental level.
3.2 Will the entrepreneurship trend die out?
We have during some years been able to observe a growing trend of entrepreneurship, where an increased number of people have sought out to start their own ventures. The small businesses owners are badly hit by lockdowns and shops and restaurants are as a result going out of business. What will happen with them after the crisis, and will this result in the end of entrepreneurship?
We believe that entrepreneurship is a state of mind and this pandemic will bring creativity out of people. Entrepreneurship will not die, it will evolve.
A crisis tends to fuel entrepreneurship and innovation, and a disruption of current magnitude in the market will create new opportunities. Many digital tech entrepreneurs are currently flourishing, and we will most likely see many more enter the growing market sectors. In fact, opportunities even lie in the market of providing support to struggling small businesses during the crisis, where entrepreneurs can provide smart solutions within paytech, enabling home delivery and much more.
3.3 Digital workers and shifting work-life priorities
Due to lockdowns many companies shift to working remotely and digitally assisted. The “work from home” setup has presented organisations with some immediate challenges needed to be quickly addressed in order to increase efficiency and employee satisfaction. Even if many might initially be struggling with the new setup, there are also quite some benefits of remote work if you learn to manage it (and yourself) correctly. The increased flexibility and undisturbed working hours could enhance productivity and improve private life priorities.
We therefore strongly believe that the remote working model is here to stay, and organisations will need to manage the daily work-life differently and more consciously design the employee experience. The big move has already happened unwillingly due to the coronavirus, and now that many more have experienced the value of remote work it will become a necessity when moving forward.
Cartina recently posted an article about the topic of remote working – becoming the new normal, where a deep dive of our point of view is presented along with some recommendations for success. You find it here: When working from home becomes the new normal
What do you think the world will look like after the corona crisis? We would be interested in hearing your thoughts and ideas!
Please comment or contact us for further discussions.