Preparing for the next normal: What trend will define 2021 and beyond?
OVER THE PAST FEW MONTHS, GLOBAL economies have struggled against the bearish consequences of the COVID-19 pandemic. Individuals have recorded a spike in job losses, organisations have met with extinctions and governments have increasingly piled debts. All of these, amongst many losses, were brought about by the global pandemic. However, while some industries have shown resilience through the adoption of digital mechanism which has helped in adapting to the extraordinary circumstance, a vaccine in sight has raised hopes that 2021 will be a year of transition.
The year 2021 is expected to bring a different experience away from any unexpected catastrophes that would affect individuals and businesses. This way, society can start to look forward to shaping their futures rather than just grinding through the present. However, some of the lessons learned during the global crises would serve as the bedrock for the new normal.
How the COVID-19 crisis and the recovery are shaping the global economy
Covid-19 has taught operators a different method to approaching businesses - through digital transformation. In the past, gamechanging technologies take time to evolve from new things to productivity drivers. The pandemic has sped up that transition in areas such as AI and digitization by several years.
An October 2020 McKinsey survey found that companies are three times likelier than they were before the crisis to conduct at least 80 per cent of their customer interactions digitally. Similarly, many executives reported that they moved 20 to 25 times faster than they thought possible on things like improving data security, building supply-chain redundancies, and increasing the use of advanced technologies in operations.
Today, sectors such as insurance and healthcare have seen a transformation in the form of insurtech, telehealth and biopharma. In the same vein, the consumer industries and retail has seen improvement in the digital and omnichannel business model.
Similarly, before the COVID-19 crisis, the idea of remote working was in the air but not proceeding very far or fast. But the pandemic changed that, with lots of people transitioning to working from home in a wide range of industries. Though, remote working comes with its own challenges; to decide the role of the office itself - which is the traditional center for creating a culture and a sense of belonging - and adapting the workforce to the requirements of automation, digitization, and other technologies.
In furtherance to this, the COVID-19 crisis has created an imperative for companies to reconfigure their operations and an opportunity to transform them so as to enhance greater productivity. Another McKinsey study found that in nine out of thirteen major countries surveyed, at least two-thirds of consumers say they have tried new kinds of shopping. While 65 percent or more say they intend to continue to do so. The implication is that brands that are yet to figure out strategic ways to reach consumers may be left behind
How the COVID-19 crisis could change society
With the acceleration in digitization birthing a new normal, the new forms of working will be sustained in many sectors. Healthcare system reform is difficult. While caution is necessary when lives are involved, one consequence is that modernization is often slower than it needs to be. Learning from the experiences associated with COVID-19 can show the way to build stronger post-pandemic healthcare systems.
While it is expected that governments all over the world will set up task forces, inquiries, and commissions to examine their actions related to the COVID-19 crisis, the key is to go beyond the temptation of assigning blame or credit. Instead, the efforts need to be forward-thinking, with an emphasis on turning the painful lessons of COVID-19 into effective action.
Similarly, while interim measures such as improving government operations, monetizing assets, and reducing fiscal leakages, can be helpful, the long-term answer is growth and productivity. Promoting growth will require supportive regulation, well-trained workforces, and the continued diffusion of technologies. Most of all, it will require individuals, businesses, and governments to be willing to embrace change.