Pandemics change the way people live in unforeseen ways, whether that change is gradual, or sudden.
Ernest Hemingway was responsible for coining the phrase, “Gradually, then suddenly”. It is an apt reflection of what is happening around the world as the coronavirus (COVID-19) wrecks untold damage. States, their citizens, health systems and economies are under extreme pressure from a threat that is impossible to see yet its impact is all too visible.
Hallmarks of public infrastructure – schools, transport systems, stadiums and so forth – have emptied in an effort to stop the spread of the virus. Beyond its impact on public health, COVID-19’s impact on business has been significant. Commercial certainties and activities can no longer be relied upon, with among COVID-19’s effects being millions of workers suddenly working from home. Before, they would be working from an office or store which they would have commuted to. Now, businesses are struggling to stay afloat, threatening job security and the promise of future income.
It is impossible to know how far away the light at the end of the tunnel is, or what it looks like, as the pandemic continues to plant flags in new territories and cities. COVID-19’s impact began slowly, then “happened” suddenly. While we may not know what the end looks like, we can begin taking guesses what some of COVID-19’s long term consequences will be, especially on the global economy and associated working life.
This is because pandemics have the power to accelerate change and up-end established norms. The Spanish flu, which killed between 50 and 100 million people between 1918 and 1920, is an example how an international health emergency leads to structural changes in society. As a result of the Spanish flu, by 1924 the Soviet government’s stated vision for the health sciences was one where doctors have the ability to study the “occupational and social conditions which give rise to illness and not only to cure the illness but to suggest ways to prevent it”.
Thus began epidemiology, the study of patterns, causes and effects of a disease, as a cornerstone of public health policy and research.
Remote work will no longer be the exception
It is highly likely COVID-19 will be a watershed in how the world “does” work. Today, businesses are encouraging employees to work from home if their role allows it. Working from home, or any other form of remote work, has seen mounting scientific studies pointing to its positive effects on employee productivity, employee retention, and lowering costs – though not all employee work best from home.
What has enabled the gradual encroachment of remote work onto established forms of economic productivity is technology. Today, meetings can be held over tools such as Microsoft Teams or Skype. Emails, a long-established form of communication, continues to be a staple of economic activity and production.
Now one of many communication channels, phone calls are a commonly used tool to communicate with business stakeholders where other forms are not necessarily an option. The sea change taking place in the world of work is emphasised by the 159% increase in remote workers in the United States between 2005 and 2017.
COVID-19 is going to supercharge this growth, particularly in businesses which would not have necessarily adopted remote work unless there was no other choice. It is easier for an employer to consider letting its staff work remotely when they have seen for themselves that remote work does not mean a loss in productivity or profit. This will inadvertently build “trust” as a currency across teams, where those who prefer to micromanage their teams and have resource visibility must now trust their employees to get on with the job, empowering workers to take ownership of their roles and output.
This is before considering what effect COVID-19 will have on public services that have previously relied on physical proximity to execute, such as education.
Breaking the supply chain
In addition to remote work, the world’s supply chains may also undergo a revolution as decoupling from China accelerates. The United States has waged a trade war on China while governments are under mounting pressure to choose whether or not Huawei, the Chinese phone and telecommunications infrastructure company, will be allowed to install and operate 5G systems in their countries.
China’s economic rise to become the world’s second largest economy has been fuelled in part by its abundance of cheap labour and ability to manufacture at such a scale that it is more cost effective to produce and ship a product made from China than manufacturing it locally. Over time, the Chinese economy has become gradually integrated into the world economy, with the two now irrevocably linked.
The campaign by the American government to economically decouple from China may have raised the question not only to American business, but their peers around the world, but COVID-19 may do what the Trump administration could not: lessen the world’s reliance on China.
The future of physical currency
As we have learned more about COVID-19, and how long it is capable of living on different surfaces, consideration of physical currency’s role in society deepens. A single banknote or coin will change hands several times through different transactions before it is either deposited into a bank account, lost or destroyed. In economies with a greater emphasis on physical cash, the amount of cash moving from one person to another will naturally be higher.
While the World Health Organisation has debunked reports that physical cash spreads COVID-19, it did note that people should practice good hygiene by washing their hands after handling money. In response, South Korea, which has been a hallmark in enacting aggressive anti-COVID-19 measures, took all banknotes out of circulation for a period in response, burning some. The Lourve museum in Paris banned the use of cash amid the outbreak, only accepting credit cards, while the United States has been quarantining dollars repatriated from Asia before they are recirculated.
A knock-on effect will be an increased emphasis on electronic payments, a greater reliance on online purchasing, contactless payment systems, and upon the design of banking and telecommunications infrastructure as they adapt to changing circumstances.
If a large proportion of economic activity becomes electronic, telecommunications infrastructure will need to be upgraded to match demand. The design of bank branches will change, since there will be a reduced need to store, accept and distribute cash. If all cash is moving online, what does this mean for crypto currency? Will it become in vogue once more?
Even among national banking institutions, it could lead to a reduction in available currency units, particularly those that are worth less than their minting cost.
COVID-19 will likely leave a lasting mark on the world, in addition to those who have and are suffering at the condition’s hand. It has reminded us how the world’s connectedness is a privilege that cannot be taken for granted. COVID-19 will likely represent a key moment of change in how the world lives and works, with its results only discernible 20 years from now.
When’s it’s all over, society and work will have changed forever. The “normal” we knew before COVID-19 will be unrecognisable in the near future.
To find out how Letsema has changed to help flatten the curve, read more here.
