How the world is changing

It’s interesting to see how the changing world around us in light of the coronavirus pandemic. Some of these changes will be temporary, of course, but some should last longer.

This article explains 10 ways I think the world should change post-coronavirus.

TL;DR: The world will change because tech gives us the ability to change our lives. If you don’t leverage it, you will be left behind.

Context

The coronavirus pandemic has moved many countries to declare states of emergency. Other countries will follow as soon as the situation becomes that bad there too. In countries with large service economies, many people can work from home and don’t have to be in the office. Many are taking advantage of this situation to avoid closing down completely. Businesses in the entertainment and tourist industries are suffering because they cannot do this.

Don’t kid yourself that life will magically return to normal in the next few weeks. We’re in this for the long haul. All the talk about ‘flattening the curve’ helps a country’s health service cope with sick people.

Photo by Pixabay on Pexels.com

But that means the pandemic will last a longer period of time.

Think months, if not years.

We live in a changing world.

I’m curious to see what habits and behaviour people will keep when this is over.

The real question is: will they or will they struggle to adapt to this brave new world?

Predictions for a changing world

  1. An increase in automation and concomitant decrease in (blue-collar?) work.

Manufacturing across Europe had already been changing before the coronavirus. With a need to keep factories running while having as few people as possible on site, the coronavirus is only going to force manufacturers to consider even more automation. The decrease in the cost of automation helps. This will not just affect blue-collar workers either. Many people on production lines are people with technical and engineering skills. These are the kind of people you don’t expect to lose their job to a machine.

As an example, in Hungary the economy grew by 5 % last year with unprecedented investment in manufacturing. Yet the sector fired 23 000 jobs during the same period.

Couple this with advances in 3D printing. In Czechia the Institute of Computer Science took 1 week to prototype a new respirator and roll it out into production. Anyone can download the blueprint, 3D print them and produce them.

In today’s changing world I predict manufacturing will lead the way in automation over the next decade. (And I haven’t even mentioned the possibility of autonomous delivery trucks either.)

Interesting side effect: Over the next decade all those old leftie Socialists will no longer be able to claim ‘capitalists’ earn money by exploiting ‘workers’, if there are no workers and the ‘capitalists’ are still making money. (I’m looking at you Jeremy Corbyn.)

I also argue that manufacturing should be repatriated to help rebalance economies and increase voter dissatisfaction.

  1. Governments will look closer before bailing companies out.

As of time of writing the aviation industry predicts most airlines will fold by the end of May5 if things continue as is. The aviation industry has had a tough few decades – 9/11, the Icelandic volcano whose name I still can’t pronounce, and now the coronavirus. How tough must it be to run an airline right now?

Yet there’s more to it than that.

Data shows British Airways has the same amount of debt as it does cash which means it will run out soon. Ryanair’s debt is 17 % of its cash reserves. It’s sitting on a cash mountain of EUR 4 billion. It is clear Ryanair will be fine long after British Airways is in the history books.

Major airlines, their debt levels and their cash reserves
(Information from The Times of London article)

Governments are quick to try to save the airlines; Italy has re-nationalised Alitalia. But soon taxpayers will ask questions.

Why should I pay for an airline’s mistakes? If Ryanair has a business model that works so well in today’s changing world, how come other airlines don’t too?

This points to a larger issue in the industry. Companies raise money on the stock market on the understanding they will pay out dividends when available. It is correct that companies hand out money instead of stockpiling it. But doing so means the company exposes itself when something like this happens. It would be wiser to hang on to some cash rather than pay shareholders. And it would be wiser for shareholders to wait longer for returns.

I predict government bailouts in future will depend on how well companies are run in the first place. Someone needs to define best practices.

But who will that be?

Air Malta 9H-AEO Airbus A320-214 (c) Baldo Fabio Scotti

Interesting side effect: Companies that don’t need a bailout buy up the competition. For example, EasyJet is apparently interested in buying Alitalia. If they do this, governments will thank them in the short-term without realising they’re sanctioning a new soon-to-be monopoly.

  1. At last the general public will join the 21st century.

It’s funny to say this – and I am being flippant – but there are many people who don’t use online facilities in their day-to-day life. I’m not only referring to online shopping and places like Amazon. I also consider the local grocer who lets me give him my shopping list over the phone.

In places like Malta online shopping wasn’t as common as it is in other countries. A small country doesn’t have the same pull-factor for online shopping that, say, London did. Now they’re in lock-down more people are using these mechanisms because there’s few alternatives2 7.

Businesses who had prepared for this are best poised to take advantage of the changing world around us. I predict that consumers will not revert back to a time-wasting way of shopping now they know how simple it is.

Photo by eberhard grossgasteiger on Pexels.com

I don’t mean shops will become redundant. And I’m not saying people will not be able to get that face-to-face interaction that can liven up a dreary day.

I’m saying there is no need to spend time in a supermarket bumping trolleys with other frustrated people.

Interesting side effect: Advertising will change when in-store promotions are no longer effective. Expect more targeted adverts on social media.

  1. Businesses, especially smaller businesses, will use teleworking more.

I first teleworked when I was in telecommunications in the early 2000s. That’s twenty years ago. Up till today I still meet people who think teleworking can’t work and is an excuse to have a day off. Since I’m used to it, and since I know it works, I can’t understand this reluctance to accept something beneficial.

The best explanation is to remember people are afraid of the unknown. It’s only human to be scared of things we don’t understand. Now more companies are enjoying the delights of teleworking. The long-term benefits will be a decrease in rental costs, greater flexibility and more motivated employees.

I predict that people who need flexibility, like single parents, will benefit most.

Interesting side effect: If employees can be more productive in a changing world, unemployment will rise. I don’t think this will be much but it may be significant for certain sectors.

  1. Companies will tap into contact-less ways of doing business. 

One of the simplest ways to re-organise any company is to remove points of synchronous data flows. This is any part of a process where someone has to stop and wait for a colleague to do something.

For example, consider if the only way I can find out if TPS reports are done is by asking Carl. If Carl is sick, or not at his desk, I can’t get the answer. I’m blocked until Carl comes back and gives me an answer. This type of information flow is called synchronous because you have to wait for the answer before you can continue.

Instead companies should have asynchronous data flows. In the above example, I would change things by asking Carl to place his completed TPS reports in a central location, like a database or a intranet. When I need to know if they’re done I can check the intranet to find out. I no longer am blocked if Carl’s unavailable. I can check this remotely, or even from a different time zone.  I no longer need that direct, synchronous interaction with Carl.

An asynchronous process

I predict teleworking is going to force companies in this changing world to re-engineer their processes to leverage this.

Interesting side effect: Using asynchronous flows makes it easier to automate processes. And then I refer you to point 1 above.

  1. Cash will continue to die a natural death.

I’ve written about the strange situation in Malta where people hang on to cash more than they need to.

There are many advantages to switching to card payments, especially contactless payments. Initial evidence suggests people are using plastic more and we should encourage this2 7 10 11. With the coronavirus, ‘contactless’ means so much more than it used to. I predict the pandemic will push people to move away from cash which will increase efficiencies in every business.

Contactless payments

Interesting side effect: It won’t be long before banks become part of critical national infrastructures because society will not function if they’re unavailable. This will involve re-thinking how banking services are provided.

  1. Supply chain redundancy will become a thing.

If you skipped point 1 above, go and read it.

If manufacturing becomes more and more automated then costs can also start to come down. Some suppliers will be tempted to pocket the extra money and there’s nothing wrong with that.

But many customers will want to have supply-chain redundancy from now on. In January we saw how many large customers scrambled to change their suppliers to avoid depending on China at a time when it was shut down. Under normal circumstances this would be a one-off.

I predict that any savvy Board of Directors will want supply-chain redundancy to become the norm in the future.

Photo by Sebastian Voortman on Pexels.com

Interesting side effect: Automation will make it easier to move manufacturing plants from one country to another. The incentives that countries offer investors will become cut-throat.

  1. People will travel less for business

Many businesses are getting used to teleworking (point 4) and also to meeting people from abroad via teleworking tools2.

It sounds obvious but if you can have a virtual meeting with Kate from Accounts when she’s in the next neighbourhood, why not Sven from Stockholm?

This doesn’t mean in-person contact will disappear completely but it does mean that the need for business travel will be re-examined2 8. I expect many managers will want better justifications for business meetings once they see how many of these interactions can take place electronically.

Interesting side effect: Managers will soon realise that if the need for business travel is reduced, the need to wait for the “Quarterly meeting” to discuss certain points also disappears. Teams in disparate locations will become more efficient when these barriers to productivity fade away.

  1. Governments will streamline and reduce red tape.

This is a tricky one because governments aren’t always motivated to become efficient.

Now we’re seeing governments relax rules to keep the economy moving12. They’re right to spot these speed bumps and they’re correct to drop them. When the economy of an entire country is at risk, you focus on what works before focusing on ideological or bureaucratic needs.

This means that those rules or standards weren’t that necessary in the first place12. If life can continue without them then they’re not needed.

So get rid of them.

Interesting side effect: This is a golden opportunity to re-allocate people to roles more suited to their skill sets. Leaner governments will be able to attract foreign investment faster and be better prepared for the next emergency.

  1. The discussion about a Universal Basic Income will intensify.

Countries need to cater for large-scale unemployment. It’s not going to just be for a month or two after all.

I predict some countries will start experimenting with a universal income before the year is out.

Interesting side effect: We’ll see more mental health problems because we know that many people’s sense of identity is tied to their job. But we should also see a parallel increase in altruism and community spirit as they’re free to re-evaluate and re-calibrate their self.

Conclusion

There is a common theme here.

Those of you who’ve read my articles in the past, or who know me, know that I am a techie. You know I advocate for more technology when the opportunity arises.

And the common theme here is simple: Tech is helping you get through these tough times. If it weren’t for engineers, techies, and IT geeks we would be facing a global apocalypse.

This is not hyperbole.

Without the tech around you, you would be in a hospital bed sick with the coronavirus, or you’d be in a bread line begging for food.

Or you’d be in a country that doesn’t take care of its citizens. You’d be fighting bandits who are plundering your house because the state broke down.

Tell me I’m wrong about this.

Tell me there’s no need for all this tech.

And then tell me why you, and your business, should ignore the advances that can give you a competitive edge.

References

  1. We’re not going back to normal; Gideon Lichfield; Technology Review; 2020-03-17
  2. Chris Fearne: ‘We have to adjust to a new normal’; Herman Grech; The Times of Malta; 2020-03-22
  3. Robots step in as cheap labor dries up in Eastern Europe; Gergely Szakacs, Jason Hovet; Reuters; 2020-03-09
  4. Czech researchers develop top-grade respirator for 3D printing; Daniela Lazarová; Radio Prague International; 2020-03-23
  5. Most global airlines ‘will be bankrupt in ten weeks’; Robert Lea; The Times of London; 2020-03-17
  6. Italy just took full ownership of its national airline Alitalia to save it from collapse amid the coronavirus crisis. Here’s the carrier’s full troubled history; Thomas Pallini; Business Insider; 2020-03-21
  7. How supermarkets are responding to coronavirus stockpiling; Jessica Arena; The Times of Malta; 2020-03-13
  8. Pandemic ‘will transform’ how businesses work and advertise; Simon Duke; The Times of London; 2020-03-19
  9. To stop virus’ spread, Japan must end its fixation with being at the office; Shoko Oda; Los Angeles Times; 2020-02-29
  10. Coronavirus: No standing passengers to be allowed aboard buses; The Times of Malta; 2020-0313
  11. Bank of Valletta increases limit on contactless cards; The Times of Malta; 2020-03-24
  12. Maybe rules that are waived to beat the virus shouldn’t have been there at all; Mark Littlewood; The Times of London; 2020-03-23

All references were valid and correct when this article was published. Changes to referenced websites or web pages may render some references invalid. If this is the case, please leave a comment below.


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