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The Covid-19 Silver Lining

Published in Nov-Dec 2020

Khalid Naseem, Head of Strategy, Firebolt, on the unintended benefits of the pandemic.

Covid-19 has dramatically changed the world, largely for the worse. At the time of writing, about 43.8 million people have already contracted the disease and 1.17 million people have died from it. Not to mention the economic fallout which has been unprecedented. Some economists compare the fallout in the US alone to the Great Depression of 1930. As per the EU Summer Forecast, the EU’s economy is likely to contract by 8.3% in 2020. China’s economy contracted by 6.3% in the first quarter of 2020 but staged a V-shaped recovery thereafter. The official data released by the Ministry of Statistics & Programme Implementation shows that the Indian economy contracted by 23.9% in the second quarter of 2020 and according to Asian Development Bank estimates, Pakistan’s GDP contracted by 0.4% in 2019-2020. Yet, for every low, there is a high and even this devastating pandemic has a silver lining.

Commuting Time Savings

Many organisations moved to WFH mode and some are continuing to do so. As a consequence, more time is available to employees, which they can either spend relaxing, working, or learning new skills. If you commute an hour to the office and spend the same amount of time going home, you spend, on an average, 44 hours every month commuting alone which makes more than an additional work week available to you.

Lowering Real Estate Costs and Rentals

When the proximity of home to the workplace became of lesser importance to employees, some of them who used to live close to expensive city centres moved to suburban areas, where rentals were lower and living spaces larger. This resulted in falling rental and property prices in and around city centres. Home rents in Silicon Valley, which were already falling due to the rising popularity of the gig economy, have fallen by a further 30% since the outbreak of the pandemic. This has been the case for most big cities around the world, including Karachi, where monthly rentals for 235 square yard villas in the far-off Precinct 31 in Bahria Town now average Rs 35,000. Managing businesses remotely has moved from an abstract idea to a practical reality. The pandemic has made businesses realise that they no longer need expensive physical spaces in upmarket areas to run their businesses. This realisation will help them save money that can be put to better use.

Improved Work-Family Balance

Another benefit of the WFH model is an improvement in work-family balance. Employees can better manage their relationships and plan their work accordingly. However, this has also increased incidences of domestic violence but these may be attributed more to economic difficulties arising from increasing unemployment than anything else.

Indigenous Research and Development

Necessity is the mother of invention. When there was a growing need for ventilators and surgical masks, many companies pulled their resources together to develop this equipment indigenously. The solutions were affordable and robust. This hints at growing indigenous research and development activities.

Innovation and Ideas

The lockdowns and post lockdowns have made it necessary for many organisations to look for innovative ways to attract and sustain their customers and employees. Many companies now work remotely with most of their employees functioning virtually. They have tried new ideas, hacks, tips and tricks to keep them functional in these changing times. They have adopted online tools and software and many more are being developed to keep them connected and working as a team. This is not restricted to organisations – even families are looking for new ways to beat boredom. Let’s be prepared for further breakthroughs and innovations. We may come across some of the coolest ideas aimed at making the move to virtual offices seamless.

E-Learning Platforms

Many educational institutions have resorted to digital classrooms and online teaching. If this experience is successful, it will open new doors to learning and provide unprecedented access to a wider population which hitherto lacked physical access to university/college campuses due to multiple reasons. If this becomes a permanent feature of our educational system, it will help institutions bring down their costs in terms of maintaining expensive physical infrastructures, resulting in lower fees.

Online Trade/E-Commerce

The lockdown, staying at home and social distancing have fuelled the quantum of e-commerce transactions around the world. The size of the e-commerce market is about $2.3 trillion and the number of users is expected to grow to over five billion by 2024 (about 60% of the world’s population). This is likely to create many employment opportunities in the future.

Reduction in Infectious Diseases

With increased awareness of better hygiene practices, the lower incidence of many other infectious diseases has been a side benefit. This in turn contributed to increased productivity, less stress and better output quality. People usually continue with their habits once they adopt them so the chances are that they will continue with good hygienic practices even after the pandemic is over.

Less Pollution

The shift to WFH has resulted in less traffic on the roads. According to NASA, there has been a 20 to 30% reduction in air pollution in the major cities around the world. According to Marshall Burke, Stanford University’s Environmental Economist, two months of improved air quality could result in saving the lives of 4,000 children under the age of five or 73,000 adults in China alone.

The world has suffered much from the pandemic and the price paid for these benefits has been unintentionally high. However, the full impact of these positive outcomes will show up in the near future – if the lessons learned are adhered to and the good practices adopted are maintained.

Khalid Naseem is Head of Strategy, Firebolt63.