Humanity is facing the greatest crisis of our generation. Economies around the world have stalled. Globalization has been suspended and once the virus has gone down, we have to get used to the “1.5-meter economy”. This social distance will prove difficult for social beings like people.
The longer it takes, the more important the effects on our daily life are once the measurements are completed. Above all, because temporary measures generally remain during a crisis after the crisis has ended. The corona crisis will be over in 1-2 years, but the changes in our economy will be long-term. Let’s see how Corona affects our business processes:
Many organizations have an unprecedented social experience. Suddenly, all employees have to work from home. Before the crisis, remote working was a prohibited area for many companies, but now they are forced to give their employees the opportunity to work remotely. Large companies had to get organized quickly, while for some companies it was just the status quo. This increase in digital media will be long-term and will have a significant impact on the way we organize our work, property prices, and commercial property prices.
Initial surveys in the Netherlands show that after a few weeks of being aware of the situation, people are now realizing the benefits of remote working. Of course, there are still challenges, but the more we have to work from home, the better we will be successful. Once we are authorized to return to the office, some of your employees may not want to do this anymore because they have seen the benefits of working remotely.
The result is that part of your office staff moves away from the city and the office and decides to live more rural. In rural areas, they get more money for their money. An additional advantage is that they can create a dedicated office space for remote work. Depending on the number of people moving out of the city, this affects property prices.
However, fewer office workers also mean that companies need less office space. The supply of offices has exploded in many cities around the world in recent years. However, when demand suddenly drops, prices drop. This will not happen immediately after the crisis ends, but it will likely take some time.
Fewer employees in the office also mean fewer employees on the street and on trains, which has a direct impact on planned and future infrastructure projects. On the other hand, digital infrastructure has to be expanded. This is where 5G could come into play. Broadband internet access is limited in many rural areas, but 5G could change that.
Increasing the workforce is one thing, completely replacing your workforce is another. In the next few years, there will be an explosion of robotics in the factories, retail, agriculture, travel, and services industries. The rise of robots has long been expected, but this crisis will be the trigger. In the past few months, we have already seen in China that companies have been looking for ways to reopen their business without employees.
Robots cannot get sick, they can work 24 hours a day, and they don’t complain about social alienation. Over time, the investment offers a positive return on investment. As a result, more robots will go to work and we will see more dark factories where people are no longer needed and therefore the lights can stay off. The “hiring” of robots naturally takes time. However, the combination of remote work, an increased workforce, and the advantages of artificial personnel will be a catalyst for this transition to a data organization.
The crisis has clearly shown how complex and fragile supply chains are today. Everything has to work with just-in-time management, otherwise, the supply chain will collapse, as we have seen worldwide. For example, many automakers have had to close their factories due to a lack of supplies from China.
It is easier to close the intrinsic network of supply chains than to restart it. Depending on the duration of this crisis, companies will, therefore, try to procure more (raw) products on site. Many companies want to know where all their supplies come from and are looking for ways to get closer to where they live to ensure stable delivery. Decoupling from China will begin, but it will be a long and difficult road.
However, supply chains are only part of globalization. Organizations are now forced to use virtual meetings instead of face-to-face meetings. Especially in multinational companies or companies that do business worldwide, they now benefit from the advantages of video calls during face-to-face meetings: they are faster, cheaper, and more efficient. Hopefully, once we’re back to normal, this habit will persist, which will reduce the number of international business trips.
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Many companies are now forced to work digitally. This applies not only to the activation of remote work but also to the digital transformation of the company. An expanded workforce is a mix of human employees and technologies that work together on specific tasks. The future of work will be more effective and efficient, which means fewer employees can do the same amount of work.
It is a story that occurs after almost all crises. Generally, once the crisis is over and business has returned to normal, economic production will recover, but those who are laid off will no longer be hired for the same job. Research shows that workers made 17.5 percent less than their old job after the great recession. This means that companies are finding other ways to restore production and are increasingly relying on technology rather than people.
With technologies such as artificial intelligence, robotics, and blockchain, companies can increase many of today’s jobs. As a result, the economy will recover, although it may take some time, the same amount of work can be done with fewer people. This means that many people have to work part-time (the four-day working week gained ground before the crisis and can be accelerated afterward), or employees lose their jobs.
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