Many changes were already happening, but Covid-19 has accelerated and cemented them
Covid-19 has definitely shaken humankind to its core. We have not seen, nor had we imagined, anything like it and will probably not see anything comparable to it in our lifetimes. The impact of it is so large that it is really going to change the world and human behaviour forever. This new era will definitely usher in a lot of changes and we will all need to embrace them to stay relevant and useful. Most aspects of these changes will have something to do with technology. A lot of these changes were already happening, but Covid-19 has accelerated and cemented them.
Technology companies will rule the world
Technology adoption will take place much faster. For example, the work-from-home concept, which was frowned upon by many companies' management teams, is going to become commonplace. So, the usage of products like Zoom, Microsoft Teams, Google Meet, and Messenger Rooms will become much more prevalent.
E-commerce will get a lot of traction very fast. So, efficient e-commerce companies and delivery companies will be doing a lot more business. Recently, Facebook also launched Facebook Shops, which will enable businesses to set up online stores. The traditional retail industry will experience a long-term impact and thus should also focus on transitioning to online business at least for some of its transactions.
Covid-19 will force a lot of companies to find a solution for automation sooner rather than later. Robotics equipped with artificial intelligence will replace a lot of jobs in factories and in many other industries.
On-demand entertainment will become more prevalent. People will spend more time on Facebook, Instagram, YouTube, Netflix, Amazon Prime, Hulu, Apple TV, and Disney+ for entertainment and information. This shift will make regular TV programs, dish tv, traditional newspapers, and magazines less and less important. Thus, advertisement dollars will be spent differently.
Tech giants such as Amazon, Google/Alphabet, Microsoft, Facebook, Apple, Alibaba, Tencent etc., equipped with invaluable user data and artificial intelligence, will keep expanding their services to almost all sectors. These seven tech companies are already more powerful and richer than most countries with a combined market valuation of staggering $6.5 trillion. Just to put this in perspective, this combined market valuation is around 7.5 percent of the world economy ($86 trillion in 2019). Governments across the world will need to be careful about how to regulate and tax these corporations when these companies start penetrating a country with their services.
The world will move towards a cashless economy
Covid-19 has forced a lot of people to think that cash-handling is a potential risk factor. A significant number of people have started using digital wallet products such as bKash, Rocket, Nagad, etc. Our government is also pushing towards salary payments to garment workers through mobile financial services and the government will be providing five million poor families impacted by Covid-19 Tk2,500, each, through: bKash, Rocket, Nagad, and SureCash.
China has just started trials of its digital currency eRMB and, if successful, it will be a game-changer. This is going to be the first digital currency by a major economy.
Cryptocurrency – such as Bitcoin, Ethereum, XRP – are gaining more momentum across the globe as more institutional investors are buying them. Libra by Facebook is also planning to join the race this year.
Education will shift online
Covid-19 has forced schools, colleges and universities to go online. Some of these shifts will be permanent as social distancing will remain for a long time and learning online will prove to be quite a productive and effective process. Online edutech platform businesses are thriving during Covid-19. A lot of people are becoming jobless and a lot of them should take up online courses on various subjects to make them ready for future jobs.
Rich will get richer and poor will get poorer
Millions of SMEs are going to go out of business and this will create unemployment on a scale that the world has not seen before. The businesses that were performed by these SMEs, will be taken over by local conglomerates, new innovative companies and surviving companies. Innovation, flexibility and the proper usage of technology will be essential for companies to survive and prosper in the post Covid-19 era.
Access to the Internet is now synonymous with access to knowledge. So, access to the Internet will be the deciding factor for whether someone can climb the economic ladder. People at the bottom of the pyramid, without Internet access, will have a very difficult time equipping themselves for the future and thus will remain poor and exploited.
Fake news epidemic
With people spending more time on social media and messaging apps – Facebook, Instagram, Twitter, WhatsApp, Messenger, WeChat etc. – a fake news epidemic is becoming more prevalent. Photo and video editing software are becoming more sophisticated and user-friendly and thus it is getting easier to make fake content. This fake news is causing psychological problems, social unrest, political problems etc. Social media companies will have to take more responsibilities in fighting this fake news phenomenon.
Healthcare and agriculture will get a renewed focus
Covid-19 has put an unprecedented strain on healthcare systems across the globe. Every country is scrambling to get enough masks, PPEs, ventilators, etc. All the big pharmaceutical companies are trying to come up with vaccines or medicines to cure this virus. Governments are trying to bolster their healthcare system through funding and technology interventions.
Recently, the World Food Program (WFP) chief warned about a possibility of hunger pandemic that could result in millions of deaths in the near future. In addition to Covid-19, locust attacks are also bad news for the world in terms of food security. So, naturally governments across the globe are making it a priority to be able to feed their citizens. Thus, a focus on every aspect of agriculture – such as increasing production, harvests, storage, the supply chain, and food processing – will be renewed focus all over the world.
There will be big lifestyle changes
At least in the short term, fewer people will visit cafes and restaurants. Thus, food delivery services and cloud kitchens will become more popular.
Both personal and business travel will decrease. It will take years for these to return to the pre-Covid era level. So, virtual meetings will become part of regular business practice and social life. Hotels, airlines and the tourism sector will be hit hard.
People will become more health conscious. So, healthy food items, exercise equipment and indoor sports gear will be sold more.
Consumers and businesses will spend less and save more. This is bad for the economy, but this will be the reality at least for the foreseeable future. So, even though factories will be in operation sooner, slower consumer demand will keep the economy slow for the time being.
Supply chain diversification and onshoring for important industries will be prioritised
Japan's government has recently announced a $2.2 billion as part of its economic stimulus package to move its factories from China to Japan. Ten percent of that amount will be earmarked for Japanese companies that are going to move out of China to countries other than Japan. Similar action will be taken by many governments in order to shift sensitive items back to their own countries and also to diversify the supply chain by reducing their dependence on China. Bangladesh, through BIDA and BEZA, should try to take prompt and prudent action to offer the right incentives in order to attract many of those companies to come and invest in the economic zones of Bangladesh.
Governments will become more powerful
Across the world, governments have imposed lengthy lockdowns due to the unprecedented health crisis caused by Covid-19. A lot of the governments are also utilising advanced surveillance technologies – such as facial recognition, contact tracing and storing medical data – that are usually thought to be intrusive. How these surveillance technologies will be used in the post-Covid-19 era will need to be carefully reviewed by governments and conscious citizens.
Governments across the globe are coming up with trillions of dollars' worth of stimulus packages. Bangladesh's government has also announced packages worth about Tk1 lakh crore – approximately $12 billion. Proper design and successful implementation of these stimulus packages will become essential to lessen the economic shock and sustain the country during the difficult time ahead. So, government stimulus packages and projects will be the main drivers of the economy in the near future.
Tareq Rafi Bhuiyan (Jun) is the Managing Director of NewVision Solutions Ltd., a research and consultancy company.