Updated: Dec 1, 2020
Some countries are, at time of writing, now beginning to make the first tentative steps of the long journey to economic recovery from hitherto the most prolific global epidemic in living memory, with far-reaching impact across all aspects of our lives. Arguably, some mistakes and lessons were made and learnt on the path to overcoming this viral catastrophe on individual, social, commercial and governmental levels, but they were reactions to an unexpected seismic threat that had never been experienced before. This article wasn’t written to discuss failings or ask where blame should lie for handling the crisis, but rather how do we now proceed into this brave new post-Covid19 world? As mentioned, the pandemic has affected almost all aspects of our lives, I’m going to outline what, in my opinion, these may mean for us going forward, at least in the medium term.
This is probably the most crucial out of all the aspects in this list, and possibly the one that’s most outside of our control. The 2008 global financial crisis is probably the yardstick that most of us will use for comparison to our current economic standing. However, many economists and commentators have suggested such a comparison is not a fair one. Financial News London comments, “The GFC [2008 Global Financial Crisis] was, first and foremost, a financial shock that took a severe toll on the real economy. Covid-19, by contrast, is a public-health crisis. Draconian containment efforts – lockdowns, transportation bans, and restrictions on public assembly – are producing a shock to the real economy, with devastating consequences for businesses, their workers, and the financial sector.”
So the fiscal, monetary and legislative lessons learned and solutions developed from the last decade won’t necessarily help us in the decade following Coronavirus, but what about on a microeconomic level; what about our own economic prospects?
The biggest issue here (and is a recurring theme throughout this article) is the lingering uncertainty around coronavirus. At time of writing, there’s still no viable cure in sight and the world’s largest economy doesn’t seem to have yet reached the nadir of cases/deaths. This makes it very difficult to predict just how catastrophic the aftermath will be in terms of redundancies, bankruptcies, unemployment, taxation, healthcare and productivity.
Currently, of the 5 biggest economies in Europe, 1 in 5 workers are having their salaries paid or supplemented in some way by the government. This is obviously a huge helping hand for those in receipt and for their economies but is only delaying the consequences of lower productivity, lower export and lower consumer spending. The true picture is yet to be shown to us. Certain industries have already started to show signs of complete collapse such as retail, tourism and transport, but there will almost certainly be other industries that will follow.
Outside of the economic impact from this global crisis, the lockdown measures enforced on the WFH culture, remote working has become the new normal for many people, whether they liked the idea or not. The USA went from 1 in 50 people working from home to 1 in 3. That is an adoption level never seen before in such a short space of time. Of course with such swift cultural change, there was always going to be a lot of anxiety for people learning to adapt to this new way of life. Already, mental health is becoming a significant problem for these new home-based workers; Blind app found that out of 10,000 global pollers, two thirds felt that working from home was damaging to their mental health. How will workforces cope with adapting to this new way of work in the long-term? What impact will it have on recruitment, HR and corporate culture for businesses of tomorrow? We have seen that technology has played a massive part in enabling workers to continue working remotely, will there be a gulf in disparity between businesses which can and will afford to invest in technology versus those that don’t or can’t?
In addition to the more direct health and economic effects of the virus, there are wider longer-lasting implications on society as a whole. An important one which is concerning many parents and education professionals is the long-term effects on the cognitive and social development of children , having lost most of a year of education at a critical stage of childhood. Professionals are already hypothesising that social mobility of the next generation will be significantly impacted as a result of this period of interruption.
Aside from the disruption for children, there are wider implications amongst society too; there are concerns that with less interaction between colleagues, friends, acquaintances and face-to-face interactions generally, people will become less outgoing and sociable. The reduced desire to interact with other people could impact our consumer behaviour such as choosing to buy more online rather than in shops, ordering food to be delivered home rather than eating in restaurants etc. How will this pandemic shape our high streets, our future housing developments and our cities?
Aside from the obvious health concerns of actually contracting Covid19 and the possibility of it returning in some form every year, there are secondary health issues which may arise too.
The long periods of forced isolation (particularly for those living on their own) may increase mental health issues or feelings of loneliness and depression. Reportedly, 41% of the UK population could be at risk. How will healthcare systems around the world handle a potential wave of mental health cases in a short space of time?
Linked to the previous point of changing social behaviour, it’s likely, at least for the near future, travel to other countries will be hugely reduced from pre-corona levels. Indeed, many airline carriers, holidaymakers and hospitality chains have collapsed as a direct result from the dramatic fall in travel. Many businesses have already changed their rules to encourage staff to use technology rather than travelling clients or other offices. This, coupled with a wider drive to reduce their carbon footprints, means work-related travel may never return to previous levels.
Travelling for leisure reasons has also seen a substantial drop in levels. Desire for travel will inevitably return once covid19 cases fall, but this year will have left an indelible mark on people’s minds. Some people may be reluctant to travel as freely as before, perhaps having an impact on tourist numbers to China where this virus purportedly started or other countries which experienced high case numbers or deaths.
Although this article has highlighted many of the negative effects of Covid-19, it has also provided some really positive effects for people and wider society too. Many working professionals have discovered the benefits of remote working for the first time; previously reluctant employers have had to yield to perhaps previously denied requests to work from home. Many of these workers will now enjoy career options which were previously closed to them, possibly improving their work life balance.
Covid-19 has also coincided with other movements such the #BlackLivesMatter movement, removing colonial statues which have been campaigned against for many years. It’s arguable that the Covid-19 pandemic has been a catalyst for these movements and disrupting the status quo and uniting oppressed communities. On a related level, it has helped a large proportion of the world really appreciate how important our healthcare systems are and the dedication of their doctors, nurses and other healthcare workers.
It’s also worth noting that it is still far too early to deduce that the lasting effects of this global pandemic are. However, although there are some negatives as a result from the virus and its various lockdown measures around the world, it has also been a shared experience which almost the whole globe can relate to.
This article was contributed by Kwan Cheung.
The leading global provider of flexible law firm-led solutions. Complementing the world-class services of Pinsent Masons, Vario builds flexible legal solutions tailored to specific business requirements and fulfilling the needs of a modern freelance community.