I’ve long been a remote worker; I am well suited for it. Thus, it was a natural to offer a page of “remote working” resources with the recent increase in unexpected remote workers. This page had so many initial visitors that I’ve continued listed more links and resources. Check it out!
What happens, though, after the current phase of social distancing and unanticipated levels of remote work? What happens to the overall economy?
Will work – and every other facet of our lives – “return to normal?” Or will there be changes in our lives, societies, and/or economies? A new normal?
Economists are now saying that we have entered – with coronavirus and our global response – into the greatest economic recession/depression since the Great Depression. The IMF, for example, is predicting a 3% economic contraction – much greater than the 1% contraction of 2008.
Further, varied individuals and groups are speculating on corona-caused economic and social change going forward. Not all of these ideas will materialize. I have variously heard:
- “There could be a permanent shift in how people experience employment.” For example, there could be a sustained state of more people working remotely.
- “The U.S. might finally shift to providing health care to all residents.”
- “With more online meetings, there could be a permanent reduction in auto and air traffic.”
- “Societies are going to re-think their war mentalities.”
- “The economic consequences of coronavirus will – or could – effect upcoming political elections in X or Y fashion.”
- “Societies are going to develop a stronger social conscience,” or “Coronavirus is revealing deep social divisions that call us to develop a new social contract.”
- Political and religious conspiracy theories.
At a minimum, I agree with economists who are projecting deep recessionary consequences of coronavirus and our response to it. I say this as the 2008 winner of the Association of Professional Economists of B.C. Crystal Ball Award (i.e., in early 2007 I submitted the most accurate forecast of the direction of Canada’s economic indicators for the year).
In addition to a current recession (depression), we may see far-reaching shifts over time. But which shifts?
To put this another way….. Beyond the immediate fact of negative short and/or long-term economic consequences of coronavirus (and our current response to it), how are we to develop a framework for considering potential long-term changes – a “new normal?” A few thoughts:
- Start with what college students are commonly told to do – “examine your assumptions.” Why do you believe what you believe? What underlying assumptions inform your ideas? What assumptions are we making about the consequences of coronavirus? What social and economic considerations will society actually act upon?
- Review news sources for additional hints and hypotheses of economic and social factors – and their possible long-term outcomes. Look at both current ideas and analysis of how the world changed as a result of past pandemics. Don’t limit your attention to theories or possibilities that support your own world view or ideas you are inclined to agree with, consider any possibility that’s plausible. it’s not always our own perspective that wins out (who, for example, always sees their favored political candidate win an election?).
- Use economic modeling to test drive several projections based on info and perspectives you’ve collected. What could be the consequences of our economic situation and societal choices? As per study.com, “An economic model is a hypothetical construct that embodies economic procedures using a set of variables in logical and/or quantitative correlations. It is a simplistic method using mathematical and other techniques created to show complicated processes. An economic model can have many constraints, which may change to generate different property….There are five main reasons that economic models are used….. 1. To predict economic activities in which conclusions are drawn based on assumptions. 2. To prescribe new economic guidelines that will change future economic behavior. 3. To provide logical defense to justify economic policies at three levels: national/political, organizational, and household. 4. For planning and allocating resources and planning logistics and business leadership. 5. To assist with trading and investment speculation.” For more on economic modeling, here is an article from the IMF.
- Finally, consider several possible outcomes based on economic modeling exercises. Think through how you, your firm, and your social community might handle several possible long-term consequences of Coronavirus. Thinking through several possible outcomes will help you consider a number of “new normal” scenarios in which you may have to contend. This approach is something like the “jigsaw puzzle approach” that I take to collecting and analyzing market research and competitive intelligence data (gather as much information as possible, then “piece together” the information into a jigsaw puzzle of analyzable data that will look at least partially complete – more complete than if you had done no research or planning).
Kim Burkhardt is a market research and competitive intelligence consultant at Burkhardt & Co.