THE prolonged coronavirus lockdown has dramatically changed how we live and work and this has had a profound impact on the world economy. In this article, we look at the lasting economic and social impacts of the lockdown and identify four key areas that may never be the same again.
Even before the coronavirus struck, globalisation was under attack. While outsourcing to emerging markets like China has fuelled global growth, it has also left swathes of crippling unemployment in parts of the developed world. And the covid-19 pandemic has highlighted the fragility of global supply chains. As China locked down the Wuhan district, carmakers like Hyundai and Nissan were forced to shut factories in Korea and Japan, and Apple in the United States warned of the impact on iPhone supplies.
As the global lockdowns are slowly lifted, we can expect a convergence of political pressure and manufacturing expediency to force many firms to question their dependency on stretched global supply chains and begin onshoring production.
The rise of automation
If new manufacturing plants are to be built across the UK, expect much of the manufacturing to be done by robots. Indeed, research by auditing firm EY shows that almost half of companies in 45 countries are planning to accelerate automation strategies as they prepare for a post-crisis world. While this means factories and warehouse fulfilment centres will become even more automated, EY argues that all sectors of the economy, from finance to retail, could see efficiencies from the introduction of automation.
People have resisted automation throughout history, but we tend to an optimistic view. Though skilled professions have been lost to technology in the past, new professions have always risen. The challenge lies in training and retraining the workforce for a new world.
Threats to privacy
One of the most interesting aspects of the response to the coronavirus has been the way in which government and public health authorities around the world have harnessed big data to help monitor and contain its impact. From a technological perspective, the coronavirus pandemic is a testbed for new, larger-scale forms of surveillance.
The concern is that monitoring may also reduce our privacy and civil liberties.
The rise of home working
Yet our dependency on technology is only likely to increase. The crisis has changed forever the perception that home working is unproductive. While we may all miss our colleagues, many have enjoyed swapping the commute for more time at home with loved ones. The success of remote working has prompted employees and employers alike to ask the question “Will things ever return to normal?”. Many people expect a greater blend of working from home and working from the office in the future.
This has a knock-on effect on other areas of our lives. For example, the impact of this on road and rail use could be so great that several commentators are now arguing that the government would be better investing in fifth generation (5G) mobile phone and broadband infrastructure rather than major transport projects.
Of course, these are just a few ways in which our lives may be shaped by the coronavirus and recent events. There will be many more. What is clear, though, is that for many of us the world will never be the same again.
Simon Dewar is regional director at Rathbones in Edinburgh. For thought-provoking articles and helpful ideas, follow Rathbones on social media or visit rathbones.com/knowledge-and-insight