Most people assume that all these measures to fight the virus will be temporary, and that at some point—in two months, six months, or 12—life will return to normal and business will return to normal. To some extent, it may be. But many changes can be permanent.
By Johan Furtwangel Senior Lecturer, King's Business School, King's College London
The realization that life is about to change for a long time begins to gain traction. To flatten the curve of the Covid-19 outbreak, radical measures of social distancing are now being practiced in an increasing number of countries. People are asked - or instructed - to isolate themselves at home. In many countries schools are closed. The same goes for theatres, bars and cinemas. It is recommended not to travel, for leisure or business. Borders are closing.
Most people assume that all these measures to fight the virus will be temporary, and that at some point—in two months, six months, or 12—life will return to normal and business will return to normal. To some extent, it may be. But many changes can be permanent.
Social systems, whether entire economies or individual organizations, are inert and very difficult to change. Over time, business companies develop into complex and bureaucratic structures, with so many entrenched routines that they are almost impossible to change. Economies also move in a path that depends on the path. This means that they usually resist radical change, and instead move along a path that is in most cases caused by small events or historical mishaps. Even if Democratic presidential candidate Bernie Sanders and his supporters would like to see it, the US will never become Denmark.
But in times of fundamental crisis, a window of opportunity for change opens up. Sometimes this window of opportunity is deliberately used to change the course of action. For example, after the Fukushima disaster in 2011, Chancellor Angela Merkel decided, quite randomly, that Germany would end its dependence on nuclear energy. In other cases, revolutionary changes happen almost by accident, as was the fall of the Berlin Wall.
In social science research, we have long noted that sociopolitical change often occurs in a sudden burst: a social system remains stable for a long period of time, until an external shock disrupts it and activates a new trajectory.
It is very possible that the corona virus will be such an external shock, which will fundamentally reshape the way we live in several areas. Instead of simply recovering and returning to pre-coronavirus conditions, certain changes will be permanent. In three areas of our economic life, it is quite possible that the changes caused by the corona virus will remain for a much longer period of time than is currently predicted.
business travel
Business travel is generally considered critical to the success of entire organizations and the effectiveness of their management. There is no doubt that face-to-face meetings help build trust and relationships, which are often essential for a project to succeed. But now that businesses and other organizations are forced to radically reduce or stop business travel, they may realize that they are not so essential after all - as long as they find substitutes that work.
Now that employees have to rely on Skype or Zoom calls instead of flying across the world to meet in person, they may realize that video conferencing is a good alternative that's more flexible, family-friendly, and more environmentally sustainable. So in the future we may see a significantly lower level of business travel.
Remote work
Flexible working arrangements are more and more common. But extensive work from home is considered bad for people, because they tend to work longer hours. It also has disadvantages from the point of view of the organizations because it increases the coordination costs and they lose critical advantages of physical presence, such as building relationships and team spirit.
For these reasons there are signs that there has recently been a resurgence of the classic physical office: some of the remote work pioneers have brought their employees back to the office. But now that remote work is a necessity, both employers and employees will need to build capabilities and understand how to do it effectively. People will be forced to create new routines, and organizations will need to find ways to create online spaces where colleagues can interact outside of formal meetings. Good relationships in the workplace are critical to the innovation and durability of an organization. Over time it will become clear what will serve as the virtual coffee corner - a place where colleagues meet, gossip and innovate.
The corona virus may force us collectively to improve remote work, which can then develop as a viable alternative to working in offices in the city center.
Disruptions in industries
In many industries there were already significant disruptions before the impact of the corona virus. The measures taken to fight the coronavirus will accelerate these huge changes. Streaming services, for example, threaten the established business model of content creation and distribution, and Amazon is becoming a dominant disruptor in a wide variety of industries.
The "stay-at-home economy" forced by the corona virus will dramatically accelerate the transition from the old to the new, and will increase the importance of matters such as market concentration and the possible need for regulation.
The change will come from both the demand side and the supply side. More and more people will start using these services, and will start loving them, and will become loyal customers. And the supply side will also change. The current players will weaken and maybe even stop operating, and the disruptors will continue to invest from a strengthened position.
In other areas the change will be equally dramatic and perhaps for the better. For example, higher education's entry into the field of distance learning has been slow, but now that the sector is forced to deliver modules via the Internet, it is unlikely that universities will fully revert to the previous situation. Online education offers enormous opportunities - in terms of new student markets and cheaper delivery thanks to the advantage of scale.
Change happens in bursts, and the corona virus may be a critical external shock that will change parts of our lives. We think that the current changes in our lives are temporary, but they may very well be permanent.
to the article in The conversation
More of the topic in Hayadan:
3 תגובות
No
Many businesses, services and products are strings, developed because of an outdated concept
And mistaken that everyone should be employed
to be eligible for a living.
And there are also jokes about a seizure disorder.
Important article..