A deadly global pandemic (Covid-19) is a self-evidently world-changing event. With increased connectivity, no doubt the spread will be “nonlinear” an output disproportionate to known inputs. But world-changing how? We sense that things will never be the same, and thoughtful speculation about the future helps us cope with the present and, among other things, suss out economic perils and opportunities.
But that’s why, when someone makes a sweeping declaration, the best response is to start asking questions. Every prediction is just a point on a spectrum of possibilities to consider, and that will be influenced by developments no one has thought of yet. Predictions look like declarations that end the conversation, but it’s much more productive to think of them as exactly the opposite. After all, if this pandemic has taught us anything, it’s that the future is always more unpredictable than it seems.
These were the years when most manufacturing companies were converting to “just-in-time” production, which involved integrating and synchronizing supply-chains, and forgoing stockpiles of necessary components in favour of acquiring them on an as-needed basis, often relying on single, authorized suppliers and that to thousands of miles away. The idea was that lowering inventory would reduce costs. Similarly, in service industries, off souring the support services or even the development of new products or services(R&D) was considered ideal to reduce cost.
But Taleb, extrapolating from trading risks, believed that “managing without buffers was irresponsible,” because “fat-tail events” can never be completely avoided. The great danger has always been too much connectivity.” Proliferating global networks, both physical and virtual, inevitably incorporate more fat-tail risks into a more interdependent and “fragile” system: not only risks such as pathogens but also computer viruses, or the hacking of information networks, or reckless budgetary management by financial institutions or state governments, or spectacular acts of terror. Any negative event along these lines can create a rolling, widening collapse in the same way that the failure of a single transformer can collapse an electricity grid. It is one of the potentially fatal “fat tails”—events that seem “statistically remote” but “contribute most to outcomes,” by precipitating chain reactions.
Any disruption in the form of disturbed consumption cycles and depleted supply chains would exert a definite negative impact on the world economy and in turn the country’s economy. So, what may or may not happen is listed below.
What may change?
Technology innovation and adaptation will become norms for all businesses. Focus on business, technology, and data science skills which are central to productivity in the age of automation and artificial intelligence will be key for survival and growth. Companies and governments increasingly will need workers skilled in technology and data science to create innovations that will drive productivity and growth, and workers skilled in business to operationalize and lead organizations through changes. Surveillance technology is developing at breakneck speed, and what seemed science-fiction 10 years ago is today old news.
It seems the massive work-from-home experiment will be here to stay. It will have lasting impact on how team will work, how offices will be organised, how meetings will be held etc.
Many jobs will be automated. The pace of technological change is rendering many job activities — and the skills they require — obsolete. Research by McKinsey suggests that globally, more than 50% of the workforce is at risk of losing their jobs to automation, and a survey by the World Economic Forum suggests that 42% of the core job skills required today will change substantially by 2022. In this landscape of constant disruption, individuals, companies, and governments are fighting to ensure they have the skills to remain competitive.
Goods and people will move less often and less freely across national and regional borders. The success of the unregulated monopoly has hit its peak. They operate in the real world where politics, special interests and plain common sense will, post-Covid, put sand in the gears. Boeing was close to an unregulated monopoly for decades. It was a duopoly, just like online advertising is a duopoly (Google/Facebook). Boeing isn’t doing so great right now. Not a foolproof strategy on its own.
What may not change?
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