What will change because of COVID-19?
by Eugene Toh, Economics at Tuitiongenius
At the point of writing this article, there are a total of 194,516 reported cases and 7,892 deaths from COVID-19. Malaysia (and many European countries) have implemented nation-wide lock-downs. US President Trump has announced a ban on all air travel from Europe to the US.
This is a global crisis, and the more interconnected we are in an increasingly globalised world, the deeper and more far-reaching the consequences of a pandemic or large-scale disaster run. The economic impacts of the virus and the guaranteed impending recession are expected to last for more than a year. Yet, with crisis comes opportunity and valuable lessons to be assimilated.
Firms will be forced to innovate and re-examine their business strategies to adapt to shocks
Firms in various industries are in crisis, with some on the verge of total collapse. Tourism, air travel, F&B, transport, retail, leisure and entertainment, and many other service-related sectors take huge hits as people are afraid and choose (or are forced) to stay at home. Flights, hotels, tourist attractions, taxis, and shopping malls are literally empty as countries enforce travel restrictions world-wide and visitors stay away from public places.
Supply-chains globally were disrupted when China had several provinces and cities on lock-down. Were businesses prepared in any way for these unforeseeable circumstances? Many businesses will eventually fold as they crumble from having little to no revenue while costs remain high or possibly even increase. Firms that do recover from this (but not unscathed) will be re-looking a few considerations:
Are my product or service offerings of a diversified or flexible range such that I can weather a severe drop in demand from particular segments of the market by tapping on other segments, or even pivoting to entirely different options (e.g. offline vs online)?
Do I have business continuity or contingency plans in the event that a sizeable portion of my staff is indisposed?
Are there sufficient cash reserves such that the business can sustain itself for at least half a year without substantial revenue?
The businesses that do survive will certainly become more resilient as they look for more ways to buffer themselves from potential upheavals in the future.
Telecommuting will become more a part (and not apart) of the norm post-COVID-19
The COVID-19 outbreak has resulted in large-scale experimentation for most countries and firms on the practicality and efficacy of telecommuting.
Telecommuting is not what most firms consider to even be a viable option when it comes to employment. Most businesses still require employees to attend work in person on a regular basis, and telecommuting is considered a ‘family-friendly’ HR policy or perk that in practice, companies are generally only obliged to offer employees for ‘a few days in a year’.
With quarantine measures and country-wide travel restrictions in place in many parts of the world, telecommuting has like, e-learning, become almost indispensable for business continuity. Bosses will eventually be forced to figure out implementation processes and checks-and-balances to ensure that telecommuting is integrated into the corporate structure as a pragmatic and efficient way of working — especially since the effects of COVID-19 will last for quite some time.
In a post-COVID-19 world, we would expect firms to administer telecommuting as a secondary or even primary method for employees to work, with many benefits possible for both the country and the firm.
The firms save on office space and rental costs and keep employees happier, while telecommuting allows individuals to spend time more flexibly with their families and on leisure — which will have a sizable impact on standards of living and birth rates. With less travelling, traffic congestion will be eased and less time is wasted too, thereby increasing productivity.
COVID-19 could be the catalyst to widespread online education
A long list of countries, including the US, Australia, China, Italy, South Korea, North Korea, Japan, Italy, and Malaysia have shut down schools completely or partially to curb social contact and control the outbreaks. Singapore has decided not to shutter schools for now, but that could change quickly should there be a significant spike in infections.
Teachers in Singapore have started working on e-learning plans, and will probably move swiftly to conduct lessons online in the event of a school closure. Island-wide, social media and online advertisements are selling ‘online tuition offerings’ across all subjects and levels.
For various reasons, online classes have not been popular in Singapore even though they have taken off expeditiously in many other countries. In my experience as a tutor offering online classes since 2018, I find that:
Students may not be disciplined enough to complete classes on their own on a regular basis,
Students may prefer the physical classroom experience compared to online tuition classes,
Teachers/ tutors may not be adequately proficient in delivering classes in an online medium compared to classroom lessons,
Parents don’t buy-in on the effectiveness of online classes sufficiently, and
The geographical distance and time taken to travel are considerably less than other countries where online tuition has become popular
With the COVID-19 outbreak, ‘social distancing’ has become the buzz phrase. Tutors whom I’ve spoken with report that their enrolments are down 20% to 30% compared to previous years. We don’t know whether this is due to the repercussions of COVID-19 or because parents are choosing to keep their children away from unnecessary exposure to other people.
It is, however, the case that tutors and students alike are now making the effort to experiment with and even embrace e-learning, not by choice but out of necessity. It was not too long ago that Zoom was an application mostly only known to those who hold meetings online. Zoom now seems to be the preferred choice for conducting online lessons, and Skype is no longer just a platform for casual communications.
Post COVID-19, online learning will likely be here to stay as a key teaching and learning tool that is complementary for education providers as opposed to being a supplementary or ‘obligatory’ inclusion.
Governments will have to change many socio-economic policies
In many countries, COVID-19 is either left undetected, or detected too late for mitigation to be imposed when it would be most effective. Bill Gates had spoken about this issue years ago — that the world is ill-equipped to handle a widespread pandemic. He is right.
Governments need to put in place comprehensive measures and contingency plans to handle pandemics. These include:
Policies to ensure clear and accurate communication with citizens
Legal provisions to dispel fake news to prevent fear-mongering
Ready setup of a competent contact tracing team
Sufficient quarantine facilities
Adequate training of healthcare workers what to do in case of a pandemic
Stockpiling of medical supplies
Stockpiling of food and basic essentials (not toilet paper)
Border control measures
Different levels of response to different risk factors
Incentive system to encourage disease reporting during the initial stages of an outbreak
Governments everywhere will also need to evaluate the capacity and sustainability of their healthcare systems. Are there requisite hospitals, ICU beds, doctors, healthcare workers and funding to cope with a pandemic?
Italy is promoting 10,000 new student doctors without having to sit for their final medical examinations to help ease the severe shortage of doctors. This is a risky and desperate course of action but one that is imperative in the face of such an overwhelming threat.
On 10 Dec 2019, The Straits Times published a piece on Singapore emerging top in global food security index for the 2nd straight year. Yet, when Malaysia announced at 9pm last night that there will be a nation-wide lockdown, I asked my wife if we had sufficient food supplies and infant formula milk.
Singapore is more than ready for such unpredictable situations. The government has been consistently stockpiling necessities such as rice, noodles, canned food, etc. because we want to self-sufficient in the face of such eventualities one day.
Having that said, I think that countries should definitely look at the need to produce strategic goods such as vegetables, eggs, meat, fish, infant formula milk and more. In the event of a global crisis, there is a strong possibility that countries may place a ban on exports of essential goods — and this will result in shortages which are especially problematic for import-dependent countries like Singapore.
Lastly, countries heavily reliant on tourism are going to be devastated by the COVID-19 outbreak. Tourism spending was 4.1% of Singapore’s GDP and I’m not sure if that included sectors dependent on tourism (e.g. retail/ taxis/ private transport).
I do think that the Singapore economy is well-diversified, but it might also be a good time to think about trying to drive more growth domestically in times like this. Perhaps, the government can invest heavily in local food production driven by technological innovations. Private-public sector partnerships in driving e-Learning technology, exporting the Singapore curriculum and education to the rest of the world but - online?
No, business is not as usual
There are many lessons that can be learnt from this experience.
Governments need to share information and good practices readily, and develop systems and processes that can detect and nip problems in the bud, failing which, dare to take drastic measures for remedy and containment before the issues escalate uncontrollably.
Society needs to step up collectively and help the vulnerable and those most in need. Individuals need to take a logical approach instead of adding to the burdens of the country by behaving irrationally (such as spreading untruths or buying incessantly and excessively, further straining resources).
Firms need to diversify and upgrade their products or services, restructure operational and administrative procedures, retrain their staff, and keep sufficient reserves to overcome other similar occurrences.
It absolutely cannot be business as usual after the dust has settled. Many have become complacent and are thus suffering significant ramifications — in some cases, even death. Don’t let the hardships endured in this episode be just another footnote to be skipped over, or the deaths incurred be just another statistic in the annals of history.