Coronavirus, digitization and globalization

How will the pandemic change the world?

Photo from Joshua Rawson-Harris on Unsplash

For most of us, the pandemic has profoundly changed large parts of our everyday lives.

We had to give up many routines, could only meet our families and friends online, and had to interrupt many hobbies.

Depending on where you live, you might not even be able to visit parks or even leave the house at all. Even if the authorities’ relaxed some of the restrictions in many countries, not everything is back to normal.

But the pandemic is not only changing our daily lives; it is also changing the two megatrends of digitization and globalization.

The longer the pandemic lasts, and the longer we have to live with the changes, the more these changes will change global trends. Some of these changes may last forever.

What about Digitization?

The pandemic is primarily accelerating digitization. Suddenly we realize that we can do a lot more digitally than we thought before.

Whether it’s work or school, a doctor’s visit, or yoga class via zoom, you can also do it online. We can even continue to practice some of our hobbies online.

Of course, it didn’t work out equally well for everyone, but many people are surprised at how well it worked by and large, for example, in working life. Heads of many companies have long refused to allow remote work.

They thought their employees might be too distracted at home, not working properly, or preferring to watch Netflix. Apart from the fact that many employees also look out of the window in the office, look at the mobile phone, get coffee in a relaxed manner and sometimes chat longer with colleagues, it does not seem that remote work leads to less productivity.

Sure, remote work is stressful for some. Some tasks are not easy to do at home. For example, if you rely on much communication with colleagues. It’s also a problem if the company doesn’t provide you with hardware.

It’s not ideal either if you don’t have a good workplace at home and sit in the kitchen or the small living room table in front of the couch.

Of course, these are not perfect working conditions. Especially when you also have children whose schools are closed and cannot understand that the father and mother work all day even though they are at home.

Photo from Leonard Beck on Unsplash

But despite all these problems, the overall perception of the remote work is positive. We noticed that much more is possible than previously believed.

I can also speak from experience. When new coronavirus infections began to rise rapidly in my country, we all knew that there would soon be a lockdown.

In the week before the expected lockdown, the office looked very different. Everywhere people were walking around with their laptops, installing software that the company had purchased for remote work, and continuously asking the IT staff in charge how to install the software.

It was a strange feeling in the office. Then, as expected, the lockdown came, and we worked from our living rooms, kitchens, and bedrooms. But no terrible fear had come true.

The systems worked, and the personal exchange went better than expected. The teams made video calls for lunch or dinner. They exchanged things about their weekend on Monday mornings, and sometimes they even got into the conversation more than in the office.

It didn’t go perfectly for everyone, but it was better than expected for most. With a view to winter, many countries expect high rates of new infections with the coronavirus.

As a result, there may be regional restrictions again, and many people will go back to their living room office. We noticed that it went well for the first time. The second time it only gets better.

But in other areas, companies and state authorities are also driving digitalization forward, making many things more efficient. So all it took was a push, such as the pandemic, to accelerate the digitization process.

The increased digitization is also spreading beyond the job into many areas of life. Sports classes, visit the doctor, meeting friends, and much more suddenly go digital. And this new pace of digitization is likely to be maintained.

What about globalization?

Photo from Dyana Wing So on Unsplash

But in addition to digitization, which is advancing ever faster, there is a reverse trend in globalization.

The pandemic is somewhat slowing down globalization, which has been rising at an ever-faster rate.

There will be no de-globalization, but the process of globalization will change slightly.

When the coronavirus broke out, many supply chains were interrupted or came to a complete standstill — the result: supply bottlenecks for many products and individual parts.

Some companies had to interrupt their production as a result, or they could not accept new orders.

Since the supply chains are highly complex nowadays and usually extend over many countries worldwide, a lot can get mixed up if something goes wrong at just one point in the supply chain.

These problems also make it clear how interdependent the countries of the world are. No country is self-sufficient, and multinational supply chains are necessary to offer so many different products on the market at such low prices.

But this dependency can become a problem if it also affects essential products. Examples of this are medicines.

When a crisis in one country leads to a drug shortage in the other, it can become a problem. The pandemic has shown us how interdependent the nations of the world are.

Some countries wonder whether specific industries, such as the pharmaceutical industry, are too important for one country to relocate to another. As mentioned, the crisis will not stop or reverse globalization, but how globalization happens could change.

So far, it has been mainly economic interests and the tourism industry that has driven globalization. Except for trade agreements, politicians have been relatively passive and have watched.

This could change if states put more political calculation into the development of globalization and economic aspects.

In the future, the world’s nations could begin to define industries of national security and then determine that these industries should produce in their own country.

But which industries are essential for national security? There is no clear definition, and, depending on the interpretation, there could be severe consequences.

For example, these new restrictions could exclude some industries from the opportunities of the free world markets. The efficiency of free markets will suffer; thus, the quality of sectors that no longer have international competition could also suffer.

But even if we can expect specific steps in this direction, it will still be limited to a few industries and thus not reverse the general globalization trend.

After all, it was the globalization of world trade that made our current prosperity possible. We will continue to be dependent on free world markets in the future if we want to increase our wealth even further.

These international connections are just as crucial to cope with other major crises that we are facing. One example is climate change, the effects of which are being felt more and more from year to year, and we can only fight it together.

A globalized world can achieve more than individual nation-states, and some crises the world’s countries can only overcome together.

The pandemic also needs all countries in the world to work together.

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Til Harder

Til Harder

Young founder, tech enthusiast and writer

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