How Covid may reorder the world we know

A profound change in the global order is imminent, even though it is too early to make any judgment about the impact of whatever is happening and going to happen on the overall wellbeing of the human community and the planet.

 |  14-minute read |   04-11-2020
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Covid-19 is a health crisis. Earlier this year when it hit the consciousness of the global community, very little was known about its devastating effects. This lack of knowledge contributed to the fear and social media amplified it. In early February, when British epidemiologists and data scientists calculated the time the spreading virus was going to take to overwhelm the British healthcare system, the lockdown was not a suggested solution — they didn’t think it was politically viable. But the idea of lockdown caught the imagination of the politicians worldwide at an astonishing speed. It was also equally surprising how easily the governments managed to secure widespread public support towards their action. Doctors and scientists didn’t have a solution for the crisis. Thus, politicians, media and social media occupied the centre stage in full glory. 

Lockdown was imagined to be a political solution for the pandemic. The concept originated in British research circle, was adopted by West Europe as a governance compulsion. All EU and a number of non-EU countries are legally obliged to offer “free” medical treatment to their residents including non-citizens. It is mandatory for all earning residents to participate in the country’s healthcare scheme and they require to contribute a substantial part of their earnings to the government. In turn, the government undertakes the responsibility of providing free treatment to the residents for life. So, if a pandemic clogs the healthcare system of the country, the government is not going to survive for long.

However, this European obligation was not applicable to the developing world. Yet most other governments embraced lockdown as a possible political solution to check the spread of the virus — some of them were unbearably harsh and politically opportunistic. The consequence of Covid-19 and our response to it have brought in sweeping devastation in the world economy but this is not the only issue we are facing today. There are four points I would like to discuss in the current context, which have gained renewed significance in the post-Covid world.

main_lockdown_reuter_110420060628.jpgLockdown was imagined to be a political solution for the pandemic. (Photo: Reuters)

First, there is an existential crisis emerging out of global climatic damage that is threatening to turn the weather against us. Scientists have been warning us for the past several decades, politicians are promising to act, yet there is no collective motivation to make a decisive trade-off between short-term and long-term benefits. 

Second, there is the turbulent geopolitics that is driven by fossil fuel for the past several decades. Human civilisation is driving past the oil age without any achievable plan for the complete energy transition. Based on the current projections, alternative clean energy will not be matured enough even in 2050 to end our dependence on fossil fuel. Along with searching for an alternative source of energy, human communities need to cut down their energy consumption drastically. However, civic will and public policies are absent or hopelessly feeble today to shape our habits towards a more responsible energy consumption regime. 

Third, there is a globally expanded supply chain with China at its epicentre. Since 1980s, easy mobility of goods, capital, ideas and people — collectively known as globalisation — has been the primary driver of the world economy responsible for setting up these cross-continent supply chains. But since the financial crisis of 2008-2009, an alternative thought has risen its head as Global Supply Chain may be messy for its ability to magnify geopolitical tension quickly to a global scale or to transmit a local risk across the border following the trail of the supply chain. Moreover, longer supply chains are losing their cost advantages; they are more polluting and often criticised for ethical opacity. For the past few years, the populist idea of nationalism is gaining muscle in the mainstream politics of many countries, with victorious politicians promising to transition from offshore to near-shore.

Fourth is the dilemma of the next industrial revolution — Industrie 4.0 driven by Artificial Intelligence, Industrial Automation, Cloud Computing and Internet of Things. These technologies will make remote or location-agnostic working a widespread reality; more importantly, human decision-making will be software-assisted and less engaging. The revolution is clearly promising big benefits for business to bring higher efficiency, a better quality of the produces and reduced cost. Business needs to embrace it plainly as a matter of survival, but possibly this will be done at an expense of creating major unemployment in our society worldwide. 

main1_climate-change_110420060904.jpgThere is an existential crisis emerging out of global climatic damage that is threatening to turn the weather against us. (Photo: Reuters)

As the global pandemic presents tough challenges for governments, communities, institutions and businesses, the systems are fighting back and reinventing themselves. Curiously, the pandemic has offered an unexpected opportunity to address some of the issues as stated above and the world has been quick to start leveraging it. The pandemic has helped soften the ground so that the seeds of new ideas can be sown.

In the following sections, we will make an attempt to visualise how a few key aspects of our life like work, education, community and government, may possibly be transformed.

The future of the workplace: Lockdown has proven regular office work where business information is already flowing through digital networks can be performed remotely, sitting at home, without much compromise in productivity. In fact, in many cases, employees have shown willingness to remain available for extended hours as they are compelled to move in and out between office work and domestic chores for the whole day. Meetings with clients and colleagues including creative sessions are being effectively performed over Zoom or Webex, messaging services like Slack, augmented further with additional online brainstorming tools like Mural. If that is the case, then what motivation a corporation possibly would have to maintain a large real estate at the expensive centre of the city? It’s a golden opportunity for them to make a major saving on the cost of business operations.

Pinterest — an image sharing and social media company has paid a 90-million-dollar penalty to terminate their real estate contracts for office space. A friend of this writer running a small advisement agency from New Delhi has made a similar decision two months back, making a long-term commitment to work from home. Moreover, closing the offices will contribute to the cause of the environment in more than one way. Closed offices will reduce energy consumption that was required to keep the office building cool or warm and illuminated. If employees stop commuting to the workplace daily, the traffic on the road, both public and private, will drop down dramatically making a further contribution to a better environment.

While office buildings at the business districts perhaps will be repurposed as residential or commercial space in the future, it is very much likely that future specification of residential apartments will change to “n-BHK plus Office.” It is also likely that real estate builders in future will start building shared office towers within any residential complex where residents will walk down to a shared or dedicated office desk or conference room when needed. Likewise, shared office buildings will start appearing within existing residential localities. This eventually will encourage people to move out of the suburbs from expensive and polluted city space — a trend that is already gaining momentum in New York, as reported by the New York Times.

The future of jobs: Daniel Susskind, a Fellow in Economics at Oxford University, wrote a book titled A World Without Work in 2017. Besides Susskind, pundits are reasonably in agreement that unlike previous technological revolutions that destroyed old jobs but created more new ones, the ongoing Industrial revolution of Industrie 4.0 led by automation, AI and robots will be the destroyer of human labour without creating any substantial alternatives. The Covid lockdown expedited it. 500 million fulltime jobs worldwide have disappeared already since the beginning of this year.

Germany’s largest trade union, IG Metall, is proposing its members call for a four-day week to offset economic pressures intensified by the pandemic. The four-day week will come with a 20 per cent pay cut and there is triparty agreement among the government, Business, and Worker councils. Unfortunately, the world will need to grapple with unemployment and lesser employment. Many jobs in unorganised sectors (cleaners, waiters, sales assistants) are disappearing silently; shortened working hours are being accompanied by pay cuts. The population will be left with less income and a lot more free time gained from unemployment, saved travel to workplace, and missed corridor gossips.

The future of education: We all expect restrictions in schools will end sooner than later, leading to all countries opening their schools; however, more profound changes in the education system are on the cards. These are more driven by the industrial transformation already going on for the past few years, with the pandemic expediting the process. First is the relevance of university education. The motivation behind someone going to high school or university is particularly to qualify oneself for the job market. A jobless or less job society, as economists predict, will lack the motivation to invest in education as return on investment will be highly uncertain. Moreover, one-time education will not prepare anyone for a lifetime profession. People will have to grow comfortable with moving in and out of education, repeatedly, throughout their life. A large number of global universities already offer their curriculum online, and this trend will continue.

One of the common criticisms of the classroom-teaching approach is that mass design approach fits nobody’s requirement. It neither helps the student lagging behind within the group, nor does it sharpen the mind of the best student of the class. Online education equipped with cognitive capability assessment tools would possibly solve this problem and usher an era of customised curriculum based on the capability and maturity of every student.

Another profound change that is already spreading its wings is the role of teachers in a class. Free audio-visual class lectures on YouTube or paid content from education solution providers are already a widespread reality and will de-engage teachers from their centuries-old job roles of delivering class lectures. Instead, students will go to teachers for problem solving and homework, as the affluent few go to their private tutors today. This is good news for poor students and children of less literate parents who are not able to provide this support to their kids, neither at home nor by appointing a private tutor.

main_online-learning_110420061102.jpgOnline education equipped with cognitive capability assessment tools would possibly solve this problem and usher an era of customised curriculum based on the capability and maturity of every student. (Photo: Reuters)

The future of globalisation: In spite of the renewed talks on this topic since the outbreak of Covid-19, globalisation started slowing down since the global economic crisis in 2008. Many mocked it as “Slowbalisation”. Two major political occurrences of the past five years have been a phenomenon of this slowbalisation. First, America turned nationalist and withdrew itself from global leadership. Bringing American factories back home was much beyond the rhetoric of Donald Trump’s 2016 election campaign, as he had demonstrated his serious commitment pushing US companies to bring back production from overseas during his presidency. The second major political event of slowbalisation was Brexit, which was essentially motivated by the thought of denying East Europeans access to British jobs. In general, ultra-right political thoughts promoting competitive nationalism have swept many countries in the last decade.

China’s import has stopped growing since 2015, world trade already started concentrating in regional blocks since 2009, and the World Economic Forum is promoting the concept of production to be closer to the place of consumption. The pandemic will not end the globalisation, but surely reshape it by shortening the worldwide supply chains to a regional scale. However, with pervasive and ever-expanding communication technology, we hope the globalisation of knowledge and information, technology, literature, ideas, culture and human relationship will continue to grow.

The future of the environment: Amid worldwide noise about the environmental disaster, the energy transition roadmap is not very bright today, with frequently failed political negotiations. Climate improvement is interlocked with the energy transition, geopolitics, global industry practices and lifestyle of human communities. Today fossil fuel contributes to 85 per cent of human need; in 2050 it will still be around 50 per cent. This is because social development and human prosperity as defined today are precariously linked with higher energy consumption.

Today, talks on environmental calamity are predominantly centred around the talks of energy transition, with little focus on the need for changing the lifestyle and behaviour of global communities to reduce the consumption of energy, as the leaders tend to believe widespread lifestyle change is politically unachievable.

However, Covid-induced lockdowns globally, to our pleasant surprise, has demonstrated a real possibility of tackling climate change and a unique opportunity to reduce energy consumption, drastically. Shutting down of the economy with massive curtailment in human mobility has led to dramatic reductions in greenhouse-gas emissions, as International Energy Agency predicts a six per cent worldwide reduction of energy demand in 2020 - wiping off the demand growth of last five years. This offers a definite motivation to business, government and policymakers to permanently shut down the city offices wherever possible and ask workers to continue working from home even after a vaccine ends the fear of the pandemic. Working from home not only eliminates the need for energy to run an office for heating, cooling or lighting; it also reduces the number of cars and public transport from the road. The business has additional motivation to embrace it as this brings a unique chance of reducing the cost of business operations. While the situation is ripe with the adequate civic will to make these transitions politically acceptable, there is a big cost that the business and society will need to bear with. 

Role of state in post-pandemic time and beyond: The common man, across the globe, has surrendered a substantial part of their civil rights they enjoyed before to the state; they may not be getting it back easily. The pandemic has eroded democracy and respect for human rights on a large scale, worldwide. World over, states have started controlling a larger part of their citizens' life and they will continue to do more.

Firstly, if deep automation and AI result in widespread unemployment, then the state will be tasked to formulate a new way of distributing income and wealth among citizens — a task that is being carried out by the job market today. As an antidote to joblessness, Universal Basic Income (UBI) has been tested in several countries in the past several years with mixed results but in general, has been encouraging. This may require institutionalisation by the state to ensure the society is not at the boundary of extreme economic discrimination.

If unemployment is embossed on one side of the coin, the other side will be humongous free time available on citizens’ hand. States need to create programs to consume these free times in community development works, in creative pursuits, in recreation and competitive events. Governments are not novice in managing free times of the citizen. In the world order of post-World War II, ministries of sports and culture have done impressive jobs in creating infrastructure and community passion around sports and games, art and culture, and leisure and entertainment. Many countries in the developed world compulsorily teach cycling and swimming to all physically-able kids. We are familiar with the passion-glorification associated with sports and physical fitness as a new-age syndrome. Needless to say, all transformative changes will create the need of redefining the sates themselves with a new policy framework, new legal framework and new rules of the game. These are massive jobs and will be good enough to keep the sates busy for the next decades to come.

It is too early to make any judgment about the potential impact of whatever is happening and is going to happen on the overall wellbeing of the human community and on the planet, but a profound change in the global order is imminent. 

Also Read: Why post-Covid life will be all about managing daily disruptions

Writer

Srijnan Sanyal Srijnan Sanyal @srijnan

The writer is a specialist business strategy consultant in exponential technologies including Artificial Intelligence, Industry Automation, Cloud Computing and Internet of Things. He lives in Germany and works for European manufacturing industry.

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