Our world is now in the throes of an unprecedented challenge. Since time immemorial, the human race has encountered the vicissitudes of fortune and needless to say, we have weathered all storms with remarkable fortitude.
But this time it is totally different. The novel coronavirus pandemic has caught us by surprise as we have never encountered such an adversary before. Heath crises have occurred before and they will occur in the future too, but never have we faced an onslaught on such a global scale. The adverse impacts of Covid-19 have led to a fundamental quest for survival.
Currently, the world is combating health, social, financial, and economic crises at one time. We do not have accurate estimates of exactly how long the world will be ensconced in the grip of this pandemic. However, there is a consensus among economists that there will be severe negative impacts on the global economy. In such a situation, individuals, countries and societies are adopting new strategies for survival. In the last few months alone, many new concepts, methods, approaches and ways of ensuring our existence have emerged.
New opportunities and realizations have surfaced in the world and we have been compelled to shed many conventional techniques of social and economic interaction. New interpretations of rather mundane concepts, such as ‘quarantine’, ‘human isolation’, “social distancing” and ‘lockdown / shutdown’ have surfaced and their true consequences are slowly beginning to sink in.
According to the World Economic Forum (WEF), an estimated 2.6 billion people – one-third of the world’s population – is living under conditions of lockdown or quarantine, a fact that has revealed the inherent need for social interaction in human beings. The prescribed two-meter social distancing rule distance may have a prophylactic effect, but its socio-economic consequences are devastating.
According to Statista (a global data portal), most major economies will lose at least 2.4 percent of their Gross Domestic Product (GDP) which translates to a loss of almost 3.5 trillion U.S. dollars in 2020. The World Trade Organization (WTO) estimated that world trade will be reduced by 30-32%. In addition, the International Labor Organization (ILO) warned that 195 million people are likely to lose their jobs worldwide.
There is widespread fear that this pandemic could lead to a global recession on the scale of the ‘Great Depression’ (1929-39). The negative economic fall-out will be largely driven by a decline in aggregate consumption demand. The restriction on travel and social events have severely impacted travel, tourism, hospitality industries and reduced the demand for many other goods and services.
According to the World Travel & Tourism Council (WTTC) travel and tourism account for 10% of global GDP and 50 million jobs are at risk worldwide. The reduction in the workforce in many industries will further reduce the demand for goods and services because unemployed workers can no longer afford to purchase goods and services. The long-run negative multiplier effects of the pandemic are yet to be fully understood. Among other things, adverse mental health consequences of Covid-19 have also been reported in many countries.
The current scenario of isolated living has made us realize the true importance of living together. It is no exaggeration to state that Information and Communications Technology (ICT) is the bane of our existence in the current scenario. More than ever before, the adoption of ICT is a critical factor that allows for socio-economic institutions to function, albeit on a reduced scale. We can definitely expect a drastic increase in the rate of adoption of online communication tools in the months to come.
A positive externality that has emerged from this crisis is improvement in air quality in many urban centres in the world. The lockdown in several countries has reduced vehicular traffic to a minimum and air pollution has definitely fallen in many large metropolitan cities.
A recent study conducted at the University of Toronto found that in cities where a state of emergency was declared in February 2020, air pollution reduced by up to 40 per cent as economic activity came to a standstill. The study compared the Air Quality Index (AQI) in February 2020 relative to the same month in 2019 for 6 pandemic-affected cities (Hong Kong, Milan, Wuhan, Kyoto, Seoul and Shanghai). It was found that air pollution concentrations experienced a significant decline. Such a positive outcome from Covid-19 may well be a harbinger of a strong shift in favour of telecommuting.
Working from home is not a new concept, but its widespread dissemination as witnessed in the last few months is definitely without precedent. According to Kate Lister, President of Global Workplace Analytics, about 25-30% of the workforce will be working from home on multiple days a week by the end of 2021; such a structural shift in work culture is expected to reduce the diffidence of managers and executives about working from home. Significant reductions in commuting time will definitely foster greater organizational efficiency in many cases-cost savings will definitely occur. Other parameters of the labour market, such as work-life balance is also expected to register more satisfactory values.
The concept and practice of online education / distance learning was once considered rather dubious and circumspect. IT is not a travesty of facts to state that meritorious students and scholars usually stayed away from online degrees and online learning. However, education may well experience one of the biggest structural transformations the world has witnessed in recent history.
The education sector is facing the biggest challenges today due to Covid-19. According to the UN, around 1.5 billion students and 63 million primary and secondary teachers around the world have been adversely affected due to school closures in 191 countries. In response to this crisis, most schools, colleges, and universities have cancelled in-person classes and switched quickly to online and virtual modes of instruction.
Once again, our only recourse is ICT and this has doubtless worked wonders; we have witnessed a very rapid switch to existing or new software applications for online instruction. However, other challenges continue to persist on a global scale. According to UN, about 830 million people do not have access to a computer and more than 40 per cent of people have no Internet access at home. To maintain quality standards in education during crises, adoption of new online educational technologies is critically important.
Since the inception of the pandemic, Web-based videoconferencing applications such as Zoom have become the mainstay of education. The virtual classroom of today comes equipped with a suite of tools to facilitate optimal delivery of learning outcomes-no small wonder then that tech titans like Google and Microsoft have responded aggressively to both a challenge and opportunity.
To cite an example, Google has just announced that its Google Meet videoconferencing service will be now free for anyone, not just educational customers. Any individual with a Google account will be able to create free meetings of up to a 100 people-this is clearly a competitive challenge for Zoom which has experienced an exponential rise in usage over the last few months. Even when the Covid-19 crisis has passed, many of the current initiatives in favor of online instruction are likely to remain in place. There are ample opportunities now for teachers to learn new IT tools/technologies and create new teaching methods which may achieve more efficient outcomes than traditional modes of education.
The concepts of telemedicine and online health assessment have gained currency in the last two months due to the closure of clinics and hospitals. While all medical services certainly cannot be provided online, we can now introspect deeply on the extent to which powerful Web-based tools can be used to assess patients’ health concerns and monitor ongoing medical treatment.
It is likely that international civil aviation norms will undergo an irreversible structural transformation. Health ‘check points’ have been introduced at all major airports around the world in a bid to stymie community transmission of the coronavirus. New challenges and learning opportunities for governments have arisen on how to minimize exposure to the pandemic and pursue economic priorities at the same time. However, economic priorities are slowly changing as well. The priority of businesses and consumers will be changed. Consumer and businesses preferences may change from global to local.
According to the Global Business Policy Council (GBPC), the world is now moving away from globalization toward an era of isolationism and seclusion. At this juncture, it is impossible to accurately predict the long-run socioeconomic consequences of the pandemic. But we are certain that, a plethora of new learning opportunities for individuals, institutions, societies and countries will emerge. This process has already started, and a new paradigm of socio-cultural mores and economic development is likely to rule the roost.
*Iqtidar Shah and Shubhayu Mookerjee, Yorkville University, British Columbia, Canada