Rising From The Ashes – Life After Covid 19

By Olabisi Akadiri

Here we are, stuck in the middle of this Covid 19 pandemic, with no end in sight. Covid 19 is a coronavirus respiratory infection that originated in Wuhan, China. Over a period of four months, it has attained pandemic proportions, spreading to almost every continent and infecting over a million and a half people, with more than 80,000 fatalities so far. People have adopted a variety of coping mechanisms, from the mundane to the insane. We all hope for a quick return to normalcy, but one thing is sure: some things will never be the same again.

I believe there are five major issues that will need to be re-visited once the Covid 19 crisis abates. I write briefly about them below.

The Resilience of the Global Manufacturing Supply Chain: A Harvard Business Review article from early March noted that the world’s largest 1,000 companies and their suppliers owned more than 12,000 factories, warehouses and other operations in Covid 19 quarantined areas. Since then, the exposure has surely grown. This caught a lot of companies by surprise because they had not done any supply chain mapping. Many companies still don’t know the sources of some critical components for their production and service delivery. In the post Covid 19 world, this will have to change.

Countries and companies will also need to look for ways to diversify their supply chain where possible. Relying on cheap single source suppliers or manufacturers from China (or from any single location) in the future will be risky. Apart from seeking alternative overseas suppliers, there may be a preference to rely more on local manufacturing. The recent nationalist sentiment in many countries would favour this model. In this case, governments will need to develop more conducive policies, and companies will need to change their cost structures to make local manufacturing competitive again.

Chinese companies have already begun to recover and are aggressively re-integrating themselves into the global supply chain. Future pressure on China to demonstrate its reliability may inspire its government pursue its Belt and Road initiative more zealously. China might jostle for exclusive long-term access to sources of critical raw materials in Africa and other regions, and possibly create supplementary manufacturing infrastructure with Chinese personnel, materials and working practices outside of China.

The Reliability of Multinational Alliances: One of the main advantages of multinational alliances is exemplified in NATO’s Article 5; the principle of Collective Defence that considers an attack on one of the Allies as an attack on all the Allies. Whether the basis of the alliance is military or economic, this provides a sense of confidence and security to all participants. But what if everyone is attacked at the same time by an intangible and implacable foe? This is what the world is experiencing now with Covid 19.

As the health care system of every country is put under pressure, divisions are becoming evident. The United States invoked the Defence Production Act, dedicating the production of scarce and critical health care equipment by selected American companies to domestic use only. Likewise, the poorer EU countries (especially Italy) have been lamenting the unenthusiastic financial and operational support from wealthier EU countries. These wealthier states are dragging their feet over the issuing of ‘Coronabonds’, which can provide desperately needed financial relief to the poorer EU states. In the future, this can jeopardise the harmony of some alliances, as members begin to question the real benefits that they derive. The EU may fracture further even after Brexit, and countries across the world may begin to attach much greater value to autonomy and national sovereignty, to the detriment of globalisation.

The Balance Between National Health and National Wealth: Many developed countries already have good healthcare infrastructure, and equal access to health services for most of their populations. However, most of them were unprepared for the speed, scale and severity of the Covid 19 pandemic. It is now clear that a pandemic can have a sustained detrimental economic impact. Governments are trying to determine whether a balance can be struck between preserving lives and preserving livelihoods, and how this can be morally implemented. India, Italy and many other countries enforced a total shutdown of schools and businesses, maintaining only essential services. The United States, Netherlands, Sweden and several other countries have opted for partial shutdowns. Every country is itching to lift the restrictions and get back to business as usual as soon as possible.

When the Covid 19 crisis is over, governments will need to determine the most pragmatic levels of health care infrastructure and access that will be needed to manage future emergencies. They will also need to draw up policies on how to maintain economic activity when quarantine measures are necessary. Unfortunately, it is likely that developing countries will remain as vulnerable as ever in the future. Therefore, it will be important to decide how resources will be shared to limit the resurgence of a pandemic from countries that have less capacity to deal decisively with it.

Some businesses will thrive post Covid 19. I believe the insurance industry can create new business models and packages that could make it a big winner. The new focus on the importance of health to the profitability of businesses may also lead to new conversations with professional athletes and sports leagues about how the length of seasons and tournaments is managed, and how injuries are prevented. Therefore, it is possible that the familiar sports cycles of the past will look quite different in the future.

The Sustainability of Working from Home: This practice has become increasingly familiar, enough to merit its own three-letter acronym – WFH. In 2013, Yahoo circulated a company-wide memo that banned telecommuting. Now, companies that thought WFH would lead to their collapse have seen that it works. Because organisations are primarily profit-oriented, they will seek the most cost-effective and efficient benefits from this development. A popular operating model could be the shrinking of permanent staff into an essential supervisory core, while outsourcing a lot more work to consultants and contractors. These non-permanent staff could work remotely more often, and the companies would bear a reduced burden of benefits and pensions. Office space can be reduced, with rent, power, IT and infrastructure costs falling correspondingly.

This is a model that has already been adopted in some companies. Of course, there are trade-offs to consider because the model comes with its own disadvantages. In any case, there will be opportunities and requirements to build more efficient, reliable and secure online working platforms and collaborative working environments. The online video-conferencing company Zoom is experiencing a boom during the Covid 19 quarantine, but its security flaws were exposed. The future Zooms can make a lot of money in this area. Existing social networking platforms may also decide to compete in this sphere.

This operating model would now not only reduce costs and improve efficiency, but would serve as a form of insurance for business continuity in case of another global quarantine. Therefore, a new WFH way of working with reliance on consultants and contractors suggests that employers who adopt this approach will need to work out new benefits, obligations and welfare considerations to reflect its potential for risk mitigation.

The Sustainability of Studying from Home: The workplace today requires continuous learning. The advent of Massive Open Online Courses (MOOCs) has made it easier for workers to improve their credentials. Online study has been a part of higher education syllabuses for some time and is more familiar than working from home. However, the need for students from the most junior to the most senior levels of education to adopt online learning during the Covid 19 quarantine might have opened new opportunities.

A 2018 survey by Northwestern University demonstrated that the relative value of educational credentials in hiring has held steady or increased for most employers over the preceding five years. It also showed that nearly half of employers report that they have increased the level of education preferred or required for the same job roles over the previous five years – often due to increased skills demands for these jobs, as well as increased supply in the market. Nevertheless, the study found that a solid majority of HR leaders believe that credentials earned online are of generally equal quality to those completed in-person.

The Covid 19 studying-from-home experiment, combined with rapidly increasing college tuition costs in some countries, may well lead to a preference among students and parents to opt for exclusively online learning programmes in the future. Higher institutions can respond to this opportunity by designing programmes that are more intensive and involved to further strengthen the levels of accreditation. By adjusting fee structures to make these programmes cheaper than the face to face curriculum, universities can greatly expand their student body enrolment and revenue, without necessarily diluting the prestige of more conventional degrees. They would need to develop regulations that would raise the barriers to entry to protect the interests of existing established institutions, and to maintain the required standards.

So, post Covid 19, we will be entering a brave new world. Exciting opportunities await us all, but only if we use this crisis to think carefully about how we will tread when it ends. Although the crisis makes almost every country, company, family and individual feel threatened and alone, I believe that there is no better time to re-establish our personal, corporate and diplomatic relationships to work toward a more harmonious and collaborative future.