10 characteristics of a post-COVID-19 world
Most pandemics underline the role that environmental, social, and cultural factors play in their emergence and spread. History has shown that the human factor can also decrease the susceptibility to infectious diseases, with the current outbreak no exception.
Governments have implemented measures to curb the spread of COVID-19 and are now looking to minimize the likelihood of another pandemic-driven global catastrophe. The latest CSRI report discusses how COVID-19 will change the world and what the new normal might look like.
1. Inflation tail risks
Fears of rising inflation may be exaggerated, but the concern is that the post-COVID-19 world will be one of sluggish growth and barely visible inflation.
2. Multilateralism 2.0
The COVID-19 pandemic has affected geopolitics, primarily by exacerbating existing trends away from multilateralism to increasing multi-alignment. The EU's agreement on an EU Recovery Fund with significant green-economy targets illustrates that crises usually lead to more, not less, European integration.
There is no evidence that authoritarian regimes are more successful than democratic countries in fighting pandemics. Success or failure depends on various factors, e.g. experience in past health crises, speed of action, the ability to take effective policy actions or people's trust in the government and cooperation within and among countries.
Share of employees on short-time schemes to prevent job losses (claims as per April/May)
4. Big state
The policy reaction to the COVID-19 pandemic has been swift and forceful, and the extension of state powers may well outlast it.
On one hand, the pandemic may trigger desirable changes (like an improvement of social security nets), but also increase the risk of undermining market dynamics and individual responsibility. Rising public debt in response to the pandemic may also be an issue in the post-COVID-19 world.
Though globalization will not reverse (but rather slow further), we can expect more emphasis on regional diversification, nearshoring of production, and resilience rather than cost-efficiency.
In the past, supply chains were largely focused on cost-efficiency. In the post-COVID-19 world, governments and companies will lend more weight to a resilient supply of strategic products than before: supply chains will be reviewed, production will become more diversified and more local. Also increasing amounts of stock will be held.
In the twenty-first century, we will view nations in terms of their information capacity (their ability to analyze situations and make rapid changes).
Since the start of the COVID-19 pandemic, countries around the globe have introduced sophisticated digital surveillance tools to monitor the spread of the virus and protect public health. Yet, the use of these techniques has raised ethical and legal concerns: surveillance systems give the holder of information seemingly unlimited power to manipulate or discriminate against others, which may endanger economic and political freedom. Surveillance and personal data collection now enable states and companies to become information empires.
Measures to fight the invasion of privacy include the implementation of comprehensive data protection laws, awareness campaigns, and the shift to privacy-focused online services.
Having experienced the benefits and challenges of remote working during the pandemic, employers and employees may want to continue these working practices, but the legal framework for these new forms of work must change as well.
Demand for office space and business travel will probably decrease because of the shift toward remote working and cost pressures that companies face.
Also, new forms of competition and the rise of white-collar robots have made workers in knowledge-intensive service sectors more vulnerable to job losses. This means lifelong learning will become key in an attempt to create an adaptable workforce.
The growing demand for EdTech, which the COVID-19 pandemic has brought about, may change the way we learn and the approach education.
Though educational institutions will not disappear due to their critical role in integrating and teaching students social skills and societal norms, EdTech will likely become more popular as it reduces costs, provides global access to high-quality courses, and allows for more personalized learning journeys. However, in order for remote learning to be a model for the post-COVID-19 world, internet access and broadband connectivity must be ubiquitous.
COVID-19 is likely to exacerbate income inequalities and uneven cross-country wealth distribution and inequality of opportunities.
Inequality and the increased susceptibility of people from disadvantaged backgrounds have broader consequences for society as a whole, e.g. in the form of increased contagion risks, poverty-driven migration waves or crime and social unrest. We could see shifts to more social market economies emerging.
By opening up alternatives for workers to exercise their professions at a greater distance from the city, remote work is fostering a decentralization of economic activity in developed countries. Rural areas and small cities are becoming more attractive.
As history shows, cities can recover after a crisis, but require adjustments to make them more resilient. The COVID-19 pandemic has shown how vulnerable high-density cities are in health crises.
On the other hand, big cities are engines of growth that drive innovation and productivity. The pandemic offers urban planners a unique opportunity to make cities better, emphasizing public space, public transportation, housing, and green development.