Predicting a Post-Coronavirus World

Business, Journal,  Principals

Despite all the doom and gloom in the midst of the coronavirus (COVID-19) crisis, one thing is for certain: this difficult period will pass and life will go on. The only unknown is when that will be. While we could dwell in fear or despair, it’s a great opportunity to make some educated guesses at what the world will look like in the near future, providing us with an idea of how we could thrive once the health crisis is over. With this in mind, here are my 12 bold predictions of what our new reality may look like:

 

  1. An Explosion of Activities: Cabin fever is gripping the nation. There’s going to be so much pent-up energy once we are ‘free’ again that it’s likely we’ll see an explosion of outdoor and social activities. It may take a few months for momentum to build, but this exponential growth in activities will hopefully kick start the economy.

 

  1. Cash Hoarding: While it would be good news if economic activities exploded once trade restrictions are lifted, businesses are likely to continue stockpiling cash where possible with a chunk to be spent paying off liabilities that have been deferred during the ‘hibernation’ period. Despite the potential rise in activities, it’s likely everyone will continue to monitor their cash flow closely and preserve their cash reserves wherever possible.

 

  1. Lower Risk Appetite: COVID-19 is set to be a future case study on risk management for many organisations. It has amplified people’s awareness of the potential impact of significant risk. While people have relatively short memories (for example, look at how long it took house prices to bounce back after the Brisbane floods), it’s likely businesses may have a lower risk appetite for the short- to medium-term, becoming more reluctant to borrow even if credit is available and cheap.

 

  1. The Rise of Casual Employment: As a by-product of a lower risk appetite, it’s entirely possible businesses will opt to re-hire workers on a casual basis for some time. Of course, businesses need people once economic activities ramp up, but the ‘stand-down staff versus making them redundant’ conundrum is still fresh in everyone’s minds. This may create a reluctance for a mass recruitment of permanent employees post COVID-19.

 

  1. Real-time Online Interactions Becoming the ‘Norm’: While online tools such as emails, websites and social media have already been widely used in the pre-virus era, the need for social distancing has pushed businesses to accelerate the use of technology that provides real-time communication capabilities like Microsoft Teams, Skype, and Zoom. The current environment forces people who would otherwise be reluctant to adopt these technologies to start using them as a matter of necessity, proving these applications can work effectively to achieve results in the workplace.

 

  1. Globalisation May Slow: Many governments have closed their borders to contain the virus, which is proof that being self-sufficient isn’t as difficult as what was previously sold to the public. It’s likely public pressure will compel governments to bolster domestic industries that were previously outsourced to other countries as people demand their governments to be self-sufficient if another crisis were to happen. Consequently, we may find globalisation slowing its pace in the short- to medium-term.

 

  1. The Wealth Gap Could Widen: Unless current social and economic orders significantly change, this pandemic may provide an opportunity for the wealthy to become wealthier compared to the rest of the population. The reality is less affluent members of society feel the heat of any economic crisis first. While this cohort may receive government assistance, the onus is to spend that subsidy on necessities. On the other hand, the wealthy have ample resources to acquire investments after their prices have dropped substantially and benefit from the potential future capital gain when prices recover. It wouldn’t be hard to guess who the winners will be when the dust finally settles.

 

  1. An Adoption of Socialistic Views: The necessary relaxation of the national purse-strings by governments around the world to navigate the crisis may be seen by some as a proxy and experiment of the socialistic concept of universal wages. While capitalistic countries are likely to turn off the tap once the crisis is over, societies may develop an expectation on governments to be more supportive of social welfare. This expectation could influence future election results.

 

  1. Higher Demand for More ‘Me’ Time: We are a hard-working nation. Many of us work anywhere from 40-60 hours a week before the crisis started. While the lockdown hasn’t necessarily freed up a lot of time, being able to work from home has given everyone a taste of what having more ‘me’ time is like, which people may demand more of in the future. This could culminate to a higher demand for flexible working arrangements in the future as working from home raises many existential questions about what’s truly important in people’s lives.

 

  1. More Community Engagement: The current social distancing measures highlight just how much we socialise and collaborate with each other as a species. After a few weeks of not being able to be close to anyone else other than their household, people have started craving to spend time with others. This crisis reminds us that our very existence and happiness are enriched by engaging with our communities and everything we do in the future may be framed by that desire.

 

  1. More Intense Activism: The need for governments to intervene or bail out failing businesses and people who have lost material income signals that social policies can be changed if pressure is applied. I expect more activism and disruption in the future.

 

  1. Renewed Nationalism: While nationalism has already been on the rise, the current health crisis may escalate its intensity as nations are forced to fend for themselves, close their borders, and protect their own citizens. The lockdown and increasing reliance on communities looking after each other may morph into a sense of renewed patriotism. For better or for worse, our immediate communities may become more parochial and favour initiatives and activities that would benefit ‘us’ before ‘them.’

Important disclaimer: No person should rely on the contents of this article without first obtaining advice from a qualified professional person. This article is provided on the terms and understanding that the author and BDO Services Pty Ltd are not responsible for the results of any actions taken on the basis of information in this article, nor for any error in or omission from this article. The article is provided for general information only and the author and BDO Services Pty Ltd are not engaged to render professional advice or services through this article. The author and BDO Services Pty Ltd expressly disclaim all and any liability and responsibility to any person in respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this article. 

 

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