Coronavirus: The Pandemic Will Give Rise To New Economic Trends
The coronavirus pandemic has had a major impact on the world economy so far. But it doesn’t end there. What impact will it have on the world’s economic behaviour and thinking? Here are 4 likely scenarios.
Social Safety Nets Will Strengthen
The Covid-19 pandemic will highlight the importance of strong social safety nets such as unemployment benefit, right to healthcare, severance package and welfare.
Due this pandemic, we will witness mass layoffs and rising inequalities on a global scale. Costs of social-distancing will also rise, directly affecting millions of jobs that require human interaction, such as taxi drivers, customer-facing stuff and healthcare workers.
As a result, governments will realise that minimum social safety nets are vital to protecting such workers, by relieving the burden of layoffs and allowing them to avoid being forced to work.
Increased Public Health Investment
The pandemic has also highlighted the importance of investing in public health. If any group of society is particularly vulnerable to the outbreak, that makes all of society more vulnerable.
Health inequality is also a threat. Viruses do not discriminate between rich and poor. For example, an outbreak that starts in a slum, will not be confined to the slum.
The recognition will grow that public health services that are poor on preventive measures such as basic sanitation and environmental standards are a threat to every individual’s personal health. As such, this pandemic will be a cautionary tale to countries that have not invested enough in public health
The Rapid Rise Of Remote Communications
Remote communication technologies are burgeoning. Telecommuting has become the convention, particularly among white-collar workers,
With business trips also put on hold, many firms have launched new tools for virtual meetings such as Google Hangouts, Zoom and most recently, Facewall.
Although remote communication technologies have their downsides, when the pandemic ends, it is not likely that people will wholly abandon them and go back to their old ways. Their acceptance of remote communication technologies will have spread, both among users and institutions.
E-commerce May Or May Not Gain
It makes sense to believe that social distancing measures and stay-home advisories due to the virus will encourage the growth of e-commerce as shoppers refrain from going to retail stores, restaurants and supermarkets.
The severe acute respiratory syndrome outbreak of 2003 helped boost e-commerce, spurring the growth of China’s e-commerce giants such as Alibaba and JD.com.
However, the coronavirus outbreak is more serious, far-reaching and disruptive. The evidence so far relating to its effects on e-commerce is mixed.
Research has shown that while the demand for some categories of goods — such as medicines and groceries — has shot up, e-commerce activity associated with a variety of other goods and services, such as fashion, luxury goods, airlines and hotels, has plunged.
On the whole, revenues will fall due to lower demand and business shutdowns. But some long-term buying habits may permanently change. For example, those who only recently embraced online shopping due to the pandemic may not revert to their past habits of retail shopping. Seen in this light, e-commerce may gain.
