How COVID-19 Will Fundamentally Change Our Economy
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In our post-pandemic world, the work world will also be evolving, into more hybrid space, virtual space, data management, in more satellites and hub-and-spoke model than in the past. Tax and social services will also be evolving. Allianz chief economic advisor Mohamed El-Erian answers some questions about how the U.S. will get back to work. He calls the pandemic “the great unequalizer” and sees increased inequality in every institution he reviews. El-Erian warns this new bimodal distribution of wealth and fortune is much less stable than the normal distribution (bell curve) and calls on companies to take responsibility for their communities to be careful with the extra element of structural instability , in the video published on June 1, 2021, “Mohamed El-Erian: How The U.S. Economy Will Fundamentally Change“, below:
Some interesting points:
- Labor force component (commuting, restaurants, take-outs) of the economy is flexible and will likely to evolve rapidly
- Office real estate will take more time to evolve
- International travel may move toward vaccine passport
- Better healthcare for overall for every one and better compensation for healthcare workers
- Upside classroom (lecture by video and school time for solving problems) and more content via videos and teachers’ time be spent more on one-one-one
- Child care support is needed and may be supported as part of the infrastructure, and should be collaborated by private-public partnership
- We can work smarter and work more effectively in smarter work places.
Governments will have to deal with the economic fallout from the pandemic for decades to come. If they get their response wrong, countries risk economic stagnation and political division, in the video published on Oct 23, 2020, “Covid-19: how to fix the economy | The Economist“, below:
Covid-19 has been the third major disruption to globalisation within the past twelve years. The pandemic will not kill globalisation off, but it will deepen the cracks, in the video published on Sep 30, 2020, “Will covid kill globalisation? | The Economist”, below:
The talk is less on global but more on local. Discussion on supply risk is being discussed for the first time at executive level. Revolution toward on-demand economy is driven both by fear of disruption as well as by the opportunities created by internet or virtual economy. Globalisation has enabled many Southeast Asian nations to rise to the middele class, but now there is concern for developing nations just emerged may be left behind due to deglobalisation. Economic deglobalisation or nationalism would not be the silver bullet because when factories are brought back home, inevitably there is more automation instead of more jobs. COVID has deepened the cracks. The broader solution is to promote interdependence with resilience, rather than shut down the supply chain and building walls.
As a result of fear of spread of COVID-19 that may be transmitted by bills and coins during the pandemic, more and more people are switching to contactless payment format, paying with cards or apps these days. Even Germans, known for their love of cash, have switched to paying electronically since the beginning of COVID crisis. According to a survey by the Association of German Banks, almost 60% of the German people now pay by debit, credit card or smarphone apps. Marion Labouré, a strategist at Deutsche Bank and Harvard lecturer, has carried out research in this field. She says South Korea and China have even put bank notes into quarantine and destroyed bills. ‘The US Central Bank is another example,’ she adds. ‘Cash is definitely being used by fewer and fewer people. In December of 2019, one third of Germans paid with cards or apps, in November of 2020, it’s about 50 percent.’ Credit card companies, which charge fees to retailers, are profiting from this development. But data protection advocates warn that information is gathered, stored and often passed on with each electronic transaction. Sarah Spiekermann, a professor at the University of Economics and Business in Vienna, has warned of the serious consequences of this kind of surveillance capitalism: ‘Ordinary people, people who are quite similar to one another, will find themselves paying different prices for flights and hotel bookings, for instance, or they might be refused insurance or be passed over for job offers. There is also the concern for security reason and data protection, ’ in the video published on Nov 24, 2020, “Cash or card – will COVID-19 kill cash? | DW Documentary“, below:
There is also the “Smile-to-pay” technology being tested in China.
The advantage of cash is being discussed: its flexibility and anonymity are valuable. Cash represents a form of freedom. German company is finding alternative to avoid data becoming available to third party. A hybrid system seems preferred. More options may still be the best.
Covid-19 has accelerated the adoption of technologies and pushed the world faster into the future. As businesses and organizations look towards the post-pandemic era, what lessons can be learned about innovation, in food-delivery business, in the video published on March 10, 2021, “How covid-19 is boosting innovation | The Economist“, below:
There is greater inequality between companies. Startups are the engine behind innovations, but are more vulnerable than big companies during pandemic. Post pandemic, there will be more people working from home, utilizing new innovative technologies. E-learning has also expanded dramatically during pandemic and is here to stay.
Gathered, written, and posted by Windermere Sun-Susan Sun Nunamaker More about the community at www.WindermereSun.com
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