Emerging from the crisis
Emerging from the crisis when the lockdown restrictions are eased further the greatest challenge we face is striking the right balance between preventing not only the damage inflicted by Covid-19 but also that which comes from severe contraction of economic activity. This is a matter of both life and death, prosperity or poverty, as a deep recession is likely to cause widespread hardship, including increased mortality rates for reasons other than the virus. Smart strategies for re-opening business need to be formulated whilst minimising health risks.
The post-crisis world will be more indebted, less global and certainly more digital. There will be higher taxation, indebtedness and higher inflation, nations will become more protective, while navigating the transition from global to local supply chains and from physical to digital.
With some lockdown slowly lifting, we are left wondering how long we will have to live with restrictions on our daily lives and the way we conduct business.
From zooming clients, to friends and family WhatsApp group’s, digital platforms have become the only way to work. We know that these platforms can cope, broadband providers and mobile networks have handled the big surge in traffic. Going forward with the line between home and work blurred we will need to think carefully which digital platforms we use. Video conferencing, once the poor relations of face to face meetings has become the norm and looks as if it is likely to remain so for the foreseeable future. As companies start to plan how they will return to the office, considering structural changes required to accommodate social distancing. Some companies have already decided that a percentage of their workforce will never return to the office, whilst others will work partly from home, resulting in the requirement for reduced office space. Some of the workforce will welcome this new flexibility, others who have struggled and felt isolated and alone may be less excited at the prospect.
Reduced demand for plush city office space will have a detrimental effect on the commercial real estate values and investment, however increased home-working could have an impact on property values in areas further afield. Retail was already struggling, lockdown has accelerated the huge structural changes taking place in the high street and only the fittest will survive. Some larger businesses have already announced they will not be re-opening all their stores. Businesses in good financial health, able to give customers what they want, will prosper but weaker players already grappling with falling sales, rising costs and intense completion will fall by the wayside. Sadly when our high streets re-open some of our favourite restaurants, cafes and pubs will have disappeared as their supply chains and cash have evaporated.
As schools contemplate slowly returning pupils to their classrooms, some form of blended learning may still be necessary. With the announcement from Cambridge University that there will be no face-to-face teaching next academic year, it looks as if online will be the main form of learning for both students and companies for the foreseeable future.
In the future businesses will be more reliant on technology and the business technical revolution already started will accelerate, leading the economic recovery. Those who have taken the opportunity to improve their skill set will be ahead of the game.