(Intel Free Press, CC BY-SA 2.0)
In an interesting article recently published by the Obserwator Finansowy, Jan Cipiur argues, on the basis of historical precedents, that little will change in the world after the current pandemic, at least in the short-term. However, in a slightly longer-term perspective, spanning two to five years, the changes could be significant, and could apply to many areas of economic and social life. They will also affect the labor market, although the author claims that since we are social creatures, any limitation of interpersonal contacts to our immediate environment would undermine the role of the family as the cornerstone of society. This leads to the assertion that no significant expansion of remote work is likely. However, working from home is not limited, the somewhat biased example provided above of office services. This indeed represents just a tiny fraction of the economy. Meanwhile, according to the analyses carried out by the Bureau of Labor Statistics, almost 30 per cent of all people employed in the economy of the United States could work in such a system.
Remote work could apply to many sectors of the economy: shared services, finance, insurance, information technology, health, administration, customer service and education (the author of this article is currently learning through the first-hand experience about the advantages and the limitations of teaching students remotely). Of course, this process need not involve a complete transition to work from home, but a fifty-fifty division between commuting to the workplace and remote work is much more likely. However, that alone would constitute a multidimensional revolution that would undermine the current system of work, which relies on workers spending from 40 to 70 hours per week in the office. Many organizations will therefore transition to a system of distributed work, described by Jon Husband as wirearchy, organized around different rules of cooperation and management, based on knowledge, trust, interdependence (also with respect to technology), as well as focus on the results. The technologies adapted to remote work will strengthen its participatory nature, while the solutions afforded by the so-called augmented reality will create a greater sense of closeness. According to Adam Grant, a psychology professor at the Wharton School and the author of bestselling books, thanks to the current experience of working remotely it will be easier for business leaders to give their workers more control over the performed work and over their own schedules, which will contribute to greater teamwork creativity and efficiency.
The anachronistic nature of an open space
Flexible modes of work are beneficial to businesses and employees alike. Studies carried out by the World Economic Forum prove that flexible work can be more productive and that it can provide real annual savings reaching thousands of dollars per employee. As a result, investing in corporate office buildings and open spaces may become anachronistic, also due to the health risk that they generate. The workers themselves will also be interested in increasing the amount of work performed at home or at co-working centers, as this will allow them to save time and money on commuting. According to data from 2017, commuting takes an average of 80 minutes a day in the United States and Australia, 73 minutes in the United Kingdom, 64 in France, and 57 minutes in Poland. These are the average times for the given country as a whole, which means that average commutes will be even longer in the large urban areas.
Fewer hours of traditional office work will translate into less traffic, resulting in a decline in demand for cars as well as lower demand for office space. Apartments can be built and equipped in order to fulfill the needs of office work: adequate infrastructure, soundproofed walls, 3D printers. Meanwhile, prices of real estate located close to city centers will either drop or at least stop rising so quickly. The need for brief but long-distance business travel will also be reduced. It is worth noting that the 12 per cent of Americans go on six long-distance round trips each year which accounted for two-thirds of all international air traffic.
Air travel can become more expensive due to the introduction of epidemiological standards. It will no longer be possible to cram as many passengers into the airplanes as before. It may also be necessary to introduce partition screens or to change the air circulation systems. Perhaps we will see the emergence of a golden era of high-speed railways on routes spanning a thousand miles or more, with rail cars equipped with compartments that enable people to work and sleep during the journey.
Entry passes based on special QR codes
Movement and travel will be subjected to more stringent controls. Few people remember that the current mode of airplane travel involves more inconvenience and restrictions compared with the days before the attacks on the World Trade Center in New York. In order to reduce the spread of diseases, after the pandemic access to means of public transport, public buildings, and cultural venues could be based on the so-called wearables recording our vital signs as well as our contacts with infected persons or those placed under quarantine (Google and Apple have already launched cooperation in this respect). The obtained diagnosis will determine our ability to move about or to be permitted to return to work performed in a traditional workplace. This is no longer a mere fantasy. Such solutions have already been introduced in China — the residents of the Hubei region, which has been the most severely affected by the pandemic, may only leave the province after presenting a special QR code on their smartphone, which confirms their good health and contains their travel history. Outside of the safety-related values, such measures also constitute a potential threat to privacy. Therefore, it will be necessary to develop a system of mutual trust and common standards, for example, within the framework of the European Union. This could become the necessary requirement for all people traveling internationally for a long time after the pandemic.
Online consultations and treatments – telemedicine
Many changes will also take place in medicine, and above all, in the area of health care. The time of the pandemic forced patients to contact their physicians by phone, via video conferencing and through the apps made available by health care providers. In many cases this was enough to overcome people’s initial reluctance, which will enable much faster development of telemedicine with the use of remote diagnostic tools, as well as artificial intelligence and machine learning technologies. In March 2020, the company Teladoc, which is the largest telemedicine provider in the United States, recorded an increase of 50 per cent in demand for medical consultations. At the Swedish company KRY International registrations of new patients increased by 200 per cent, and the total number of clients of the Chinese insurance and tele-medical services giant Ping An Good Doctor exceeded 300 million people. Many countries (such as France or South Korea) have already announced legislative changes to enable remote medical care and provide financial support for this sector. The United States Federal Communications Commission announced that it would provide USD200m in funding to improve the quality of infrastructure used for the provision of such services. This could constitute significant relief for the primary health care system, in a situation where virtually all countries suffer from a noticeable shortage of doctors and nurses.
This will also accelerate the use of telemedicine in senior care. There are now more than a billion people over the age of 60 in the world, and this number will continue to grow each year. These novel senior care solutions will apply in particular to people suffering from chronic diseases, who are becoming a burden for their families. The shortage of professional caregivers is painful and specialized care entails additional expenses. The costs associated with dementia alone are equivalent to 1 per cent of the world’s GDP. The advances in the field of artificial intelligence, sensors and machine learning could provide at least a partial solution to the issues associated with senior care. They will free up the caregivers and the patients’ loved ones from many tedious and exhausting activities, while providing a better quality of life for the elderly people who will be able to enjoy at least partial independence for longer. This will allow senior citizens to stay in their own homes much longer than before, thanks to the monitoring of their behavior by various classes of robots and the automatic notification of relatives or the relevant social services in the event of any deterioration in the vital signs, a fall or excessively long periods without movement. The robots will also perform the daily activities: they will start the coffee maker or the electric kettle, put on the radio, and initiate phone calls.
Contactless economy
McKinsey says that the pandemic will result in the development of contact-free economy, in which direct, interpersonal relations will be minimized, although not necessarily eliminated. Digital innovation will become imperative instead of merely being a business option. Cashier-less supermarkets will certainly become widespread, and contactless payments will become the standard in the remaining stores. The significance of eCommerce will increase, and an important indicator of this process will be its popularity in China (where it currently accounts for 36 per cent of all retail sales). Even in Italy, a country with a low share of online sales, this channel of sales has increased by 81 per cent since the beginning of February and many consumers have learned how to shop online. Another inevitable consequence of the pandemic is also accelerated automation, which will affect up to 800 million jobs globally. Brookings Institution points out that automation has always accelerated after the three previous recessions, but in the past, it has never had such advanced technological foundations as it does now.
We can also expect some changes in business priorities. Economic efficiency, which has thus far led to, for example, minimization of inventories, will now cease to be the only important criterion. This will necessitate a restructuring of the supply chains. Companies will face greater pressure to increase their corporate social responsibility measures relating to environmental protection and labor rights. Many companies understand that this is also the way to achieve greater resilience to external shocks, which will become increasingly important for shareholders. This is not necessarily wishful thinking. In 2019, over 180 CEOs of American companies declared, that their activities would take into account the three pillars of growth: profit, people, and the planet (3P). These elements are supposed to determine strategies and ensure recognition thanks to solving social problems, and not only creating consumer needs.
Extraordinary supervisory measures
One consequence of the pandemic will be an increase in state interventionism, not only in the economy, but also in the private lives of the citizens. Right now, the scope of this intervention is unprecedented. Governments around the world have already announced stimulus measures in excess of USD10 trillion, which is eight times more than the total value of the Marshall Plan. Some of the state supervision measures will remain in place for many years. This fact should be taken into account in the strategies of all companies, and not only those of global players. Nearly 100 countries have subjected more than 3 billion people to a social experiment, mostly by using measures of economic coercion. This includes restrictions on work, isolation, social distancing measures, and technological surveillance instruments, resulting from the access to various personal data. “Once the pandemic ends, many governments will determine that access to these data is necessary for safety reasons,” warns the prominent Israeli thinker Yuval Harari. Many extraordinary measures could soon become a regular part of life. The activity of the infamous Cambridge Analytica company, which identified the voting preferences of Americans, will pale in comparison with the capabilities of the governments. They could obtain knowledge not only about our body temperature and blood pressure, but also about the TV stations we watch, the news we listen to, and the state of our emotions in response to various events. It is not difficult to imagine what could be the consequences if such knowledge gets into the hands of politicians.
According to Harari, societies are currently facing two fundamental challenges that will determine their future. The first is the choice between totalitarian surveillance and citizen empowerment, which can only be based on trust, also towards the world of science, whose opinions are currently being ignored or undermined by the politicians. It is also worth noting that while managing the pandemic, some countries (such as Japan, Sweden) have not resorted to coercive measures, but only rely on persuasion. Open and democratic societies could use the technological tools in order to hold governments accountable. The second challenge, interdependent with the previous one, is the alternative between nationalist isolation and international cooperation and solidarity. As evidenced by the experience of the pandemic, this is a difficult dilemma when the argument of citizens’ security comes into play. The current situation, caused by the insidious virus, is both a crucial test as well as an important opportunity for many contemporary societies.
