THE PALPABLE FAILURE TO CO-ORDINATE RESPONSES TO THE PANDEMIC, AND AN UNDERLYING TREND TOWARDS PROTECTIONISM IN BROADER TERMS ARE FURTHER CHALLENGES.
For example, it can be argued that the emergence of the ‘gig economy’ labour force over the past two decades was in part facilitated by technological advances, but as much motivated by companies looking to cut the costs of benefits and associated liabilities, and circumvent employment protection legislation, and for some of the self-employed to exploit favourable tax loopholes. It was not really intended to usher in a new era of remote working, with many adhering to a collective myth (belief) that working from home was far less productive than in an office. This has clearly been exposed as a false and sweeping generalization, and ironically what has become clear is that despite all the investment in technology infrastructure by many companies, and in such things as disaster recovery sites, a lot more needs to be done on many fronts, but above all in terms of higher specification hardware and security applications initially. It has also forced a rapid rethink on how businesses run meetings, and totally upended the way that conferences (above all international ones) and other similar mass public gatherings are conducted – the technology was already widely available, but only the necessity of the moment has seen these solutions embraced, as well as stress testing them.
Perhaps more importantly from governments’ perspectives, it has exposed that fact that access to the necessary telecoms infrastructure is deficient, both on an urban vs. rural axis, as well as the critical aspect that those on low incomes are often excluded, due to cost, restricting professional development opportunities, and effectively also impairing their children’s educational opportunities, which in turn impairs overall skills levels in the workforce as a whole. The more profound challenge is if governments recognize, as they should, that changes in the economic landscape may well hit low income jobs hardest, then an extensive programme of retraining (‘up-skilling’) will be required, with digital platforms offering a likely much more cost effective and flexible medium of delivery (this applies to corporates as well, obviously).
The final point for this article, though the changing global landscape will doubtless provide the basis for many future ones, relates to the already widespread talk of a ‘green recovery’. Wherever people stand on climate change, there is no denying that lockdown measures precipitated a colossal and pretty much immediate drop in pollution levels, which many had thought would involve a much more exacting and costly process. It should go without saying that unless this drop is sustained (which in the first instance it will not be), the respite will be transitory, and the economic costs of an abrupt shift have been patently obvious, but a precedent has still been set. Prior objections based on the cost of a ‘green transition’ fall sharply down the list of key considerations, at least from a government spending perspective, as this is the type of focussed and forward-looking infrastructure investment which will be needed to ‘give wings’ to the post Covid-19 recovery phase.
On the other hand, the proportionate cost for developing economies remains that much higher, and still runs up against objections that there are other higher priority projects, for example the acute need for much improved healthcare infrastructure as highlighted by the challenges of dealing with the Covid-19 pandemic, let alone education and basic transport. Even among developed economies, there are very different views, in no small part differentiated by those countries that are net importers of hydrocarbons as against those that are net exporters, who would have to consider the offsetting cost of stranded assets and lost jobs in the hydrocarbon sector.
The palpable failure to co-ordinate responses to the pandemic, and an underlying trend towards protectionism in broader terms are further challenges. The latter is also evident, for example, in the rather surprising failure of western governments, who have been banging a loud drum about security concerns surrounding Huawei’s dominance in 5G equipment supply, but thus far eschewed the opportunity to coordinate direct investment towards the alternatives offered by Ericsson and Nokia. The simple point is that with governments rapidly accumulating debt to fire fight Covid-19’s already huge economic impact, it would surely be no bad thing if they were to co-ordinate and pool resources to revive the global economy in its wake, above all given the human cost of the virus. Sadly at the time of writing, this looks to be a hope rather than a realistic prospect, though the opportunity remains writ large.
Marc Ostwald E:
marc.ostwald@admisi.com T: +44(0) 20 7716 8534
9 | ADMISI - The Ghost In The Machine | Q2 Edition
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