How coronavirus will change the world over the next 10 years

The world order has changed abruptly as a sudden spread of the coronavirus triggered exploding media coverage, wartime-like political decisions raising lockdowns and huge economic losses throughout the world. Coronavirus as a pandemic will pass — maybe within a few months, maybe a year or two. But it’s an irreversible punch for the modern world will bear consequences for at least 5 years, more likely — a decade. Getting back to “normal” (or “new normal”) will be a slow and gradual process. Here are the 10 most important changes that will happen to the world as a result of COVID-19.

1. Global travel will not be that easy anymore, as it used to be in 2010s. Travel restrictions will hold long after the active phase of the pandemic is over. Invisible wall between countries that overcome the contagion (developed and developing) and those who struggle to do it (mostly undeveloped) will arise. Air travel to undeveloped countries (many of which used to be tourist paradise) will be banned or heavily restricted, as they are likely to struggle to contain the virus. Travelers from those countries might be quarantined when they travel to Europe or US for the next couple of years. Air travel between rich parts of the world will be partially restored, but (selective) COVID-19 express testing and immunization passporting will become an important part of security measures. Moreover, rising unemployment and likely collapse of the low-cost airline industry might restrict access to recreational travel.
2. Mobile phone tracking by governments will go mainstream. Already several years ago, there were predictions that the Chinese model of controlling and spying on citizens throughout mobile phones is going to be exported worldwide. Many people were skeptical about this model being implemented in Europe, well known for its strict privacy policies and liberal values. However, the devastating impact of pandemics, as well as its media coverage, changed the odds completely. Now EU and US government are keen to sacrifice privacy for the sake of saving human lives and limiting the economic impact of viruses (at least this is what they are going to officially admit). Dutch PM already announced that an app to track the movement of infected people (and non-infected as well) will be the key to relaxing lockdowns. That brings us to the situation where each person has a choice of either continue a voluntary lockdown at home or agree to be tracked by the government. And the government has a clear solid rationale for this backed by needs to save lives and prevent an economic crash. This situation was unthinkable of just 3 months ago. And the most important is that the pandemic will pass, but the tracking might remain in place.
3. The era of globalization will be followed by a decade of growing economic isolationism. As 2017 economist article puts it, it took roughly 40 years to recuperate the same degree of economic freedom and globalization that existed at the beginning of 1910s in pre-World War world. In fast-paced 21st century recuperation will definitely happen faster. However, 5–10 years of trade and labor protectionism may follow the pandemic. The first offsprings of selfish behavior are already visible with fights around access to ventilators and potential vaccines. After the crisis is over, nations will attempt to become more self-reliant with regard to essential supplies and food. Countries having implemented lockdown will need to fight the rising unemployment, restricting access to the job markets for foreign workers.
4. Political turbulence will rise across the world, as many leaders have shown themselves incapable of quick strategic actions. Coronavirus pandemic is shedding light on government inefficiencies, lack of strategic thinking and actions worldwide. The leaders that were seen by many as strong and wise now appear embarrassed and weak in the face of an emergency. US, UK, Russia, Brazil saw their leaders underestimating the problem, accepting the wrong inefficient course of action and lacking centralized coordination power against the epidemic. As a result, governing parties in democratic countries risk losing vigorously in the next elections (UK, US). In developing countries where the bravado leaders fail to understand the size of the threat are risking creating grounds for revolts in the aftermath of the epidemic (Brazil, Nicaragua, Belarus).
5. Inevitable reorganization of EU is going to happen. It is going to either become more centralized and integrated or we are going see more exits. The crisis highlights EU deficiencies and lack of integration (and integrability) — even more than past migration crisis and financial crisis. EU institutions are built to ensure steady but gradual progress, driven by lengthy discussions and alignment of all country members. Therefore, in times of crisis they are dysfunctional by design. Unluckily and ironically, countries that were hit hard in 2008 and already were heavily indebted — Spain and Italy — appeared at the forefront of pandemics. The recently arisen coronabonds scandal is in essence focused around the way the rich North (led by Germany and Netherlands) is going to help the indebted and devastated South (led by Italy and Spain). The key question is to what extent the solidarity between countries should go. The North coalition now faces a tight trade between two very bad options. First is to get into a risky affair of using their taxpayers' money to help (either though coronabonds or other means) to southern members that potentially can be on the edge of default already in the short-term. Second is to provide only limited help and provoke more EU exits in the next couple of years, which will challenge the idea of EU as well. So essentially the choice is to invest now and slightly reduce the chance of partial disintegration, or to save money and increase the risk of EU collapse, but limit the losses. At least, the UK may finally start feeling good about Brexit.
6. The rising gap between the rich and the poor will start to become intolerable. In safe and healthy times, when the economy is healthy and growing, the discrepancy between rich and poor is less striking and more tolerable in society. In times everyone’s health is at risk and the economic pie shrinks, the question arises how the suffering and economic losses should be distributed in a fair way. For example, rich people already have priority in access to testing, ventilators, drugs and in some time to vaccines. This preferential treatment is noticeable globally, a bit less in Europe, a bit more in US and emerging countries. In Russia and US wealthy people already buying personal ventilators, while in public hospitals there is a severe lack of them. After the active phase is over, income difference may create tension on the background of rising unemployment. Especially now, in times of when Instagram and the online news driving awareness of income and spend of top managers, politicians, football players, etc. It may create more grounds for social unrest in developing countries and the rise of populists parties in developed ones.
7. Robotization and automation are going to accelerate. Risk of further pandemics or second wave will be accounted for in large-scale automation business plans and will lead to more automation projects coming to life. Companies are already seeking to ramp up their investments into automation technology, even despite experiencing huge economic losses. In companies where gradual automation was on the agenda already for long time, now it’s jumping to the top of the list. Especially in currently high-demand industries like food supply, pharma, protective equipment. Banks will accelerate their digital propositions. Healthcare will get more and more online. Frontrunners in each industry will start the movement, which will inevitably and quickly be followed by others. Cause’ if you see your competitors massively replacing humans with robots on the background of global pandemics, there is not much choice left for your business.
8. Working remotely will become a new normal (even more than today). Many companies are going to learn the lesson out of this global work-from-home experiment and will become more favorable to “home offices”. This also will trigger rise in cross-border employees working from home, remote internships, etc.
9. Rapid consolidation will affect many industries. Airlines are first in line for consolidation. Hospitality, retail, automotive and finance (e.g. certain fintechs) may follow. The sudden drop in revenues followed long-term repeat risk in the industries which are highly competitive and low margin clearly creates grounds for consolidation in order to push down cost and have more power over pricing increases (e.g. in Airlines).
10. Government participation in the economy will increase. In 2008 banks were first in line for bailouts, in 2020 those are airlines, non-essential services (e.g. restaurants) and small businesses. Biggest airlines will most likely to opt for and receive bail-out. SMEs, hotels and restaurants will receive one-time subsidies, tax breaks and loan payment holidays. Countries that will not intervene, may see a sharp rise in unemployment and crime, bank failures and rise of the shadow economy — which altogether is likely to be more costly compared to early bail-outs and help packages.

The COVID-19 crisis might look like a negative event for the global economic and political landscape, as any crisis is destructive for the old order of things. But, looking from the historical perspective, any crisis is good in a sense it provokes the decay of unstable and inefficient constructs, and clears off the space for the new ideas, approaches and business models.