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Beyond covid-19 lies a new normal—and new opportunities

Beyond covid-19 lies a new normal—and new opportunities
Technology
The covid-19 pandemic has unleashed changes that seemed unthinkable just a few months ago. In February, it seemed unthinkable the entire white-collar workforce of many countries would soon be working solely from home. It seemed unthinkable air travel would plummet by 96%, or millions of migrant workers in India would be forced to undertake a herculean exodus, walking thousands of miles to their home villages. Of course, covid-19 and the extraordinary response were not really unthinkable. Epidemiologists had long warned it was only a matter of time before such a disaster struck. And though the crisis seems to have been with us forever, the reality is the pandemic is still in early days. More unthinkable changes await.

Understanding the pandemic’s impact demands scanning for risks and drawing insights from a wide range of domains. EY convened more than 100 leaders around the world—from futurists to CEOs—in virtual sessions to develop a far-sighted view, imagine the unthinkable, and, crucially, identity the steps business leaders need to build into their thinking about the future. The discussions were guided by the EY Megatrends framework, which is designed to expose business leaders to trends and forces far outside their usual scope of analysis.

The result? Leaders expect far-reaching changes, but, critically, see an opportunity to shape the world for better. This is a high-level snapshot of the post-pandemic future they envision ( read the full report ). But at EY, we’re also challenging you to imagine unthinkables and consider key questions for a better working world. Finally, we offer principles to guide leaders steering their organizations through this time of unprecedented uncertainty.

The balance of power and influence will be realigned as US-China relations become even more fraught. The pandemic is further eroding multinational institutions, creating a vacuum of global leadership. This could cause a return to multipolarity, with an expanded role for Europe or for smaller countries whose prestige was enhanced by their effective pandemic response.

Understanding the pandemic’s impact demands scanning for risks and drawing insights from a wide range of domains.

Covid-19 will also advance the backlash against globalization amid the sharpest reduction in international flows (e.g., trade, investment, people) in modern history. With vulnerabilities in supply chains exposed, we can expect redundancy and resilience to be built into them at the expense of some efficiency. Manufacturing will come closer to home markets, boosting the trend toward regionalization and re-localization.

Labor mobility has fallen sharply since the start of the pandemic, as governments have clamped down on travel and immigration. But even as the pandemic reduces the flow of people, it enables a different concept of labor mobility. If people can’t relocate for work, work will relocate for people.

Imagine the unthinkable: Could we see the US dollar displaced as the world s reserve currency?

A better working world: How are you restructuring your global supply chain for resilience and flexibility?

Covid-19 laid bare weaknesses in social safety nets and will likely force a reckoning with growing inequality. Social disparities between the politically left and right, old and young, rich and poor, have widened. Workers are demanding better health safeguards, benefits, and pay. Government reforms in response could include recognizing undocumented workers, investing in health-care capacity or even introducing universal basic incomes.

Sustained protests against systemic racism have swept across the US, with echoes in other countries. While our sessions didn’t treat the topic because they predated the protests, we think it’s no coincidence this is happening during the pandemic: People experiencing a systemic reset may also be more inclined to think about correcting systemic racism. The expanding Black Lives Matter movement may be a harbinger of increased action on issues of social justice.

Covid-19 will fundamentally reshape cities. Health concerns will drive big city residents to suburbs and small towns, while remote work will make moving out of expensive city centers increasingly feasible. These shifts have profound implications, affecting everything from tax revenues to urban planning and education.

Imagine the unthinkable: Could universal basic incomes become real in some societies? How would it impact your organization?

A better working world: How will your company lead in addressing the intertwined issues of health, income inequality, and racism?

Remote work is here to stay, accelerating the arrival of a long-anticipated trend: the delinking of talent from place. Companies will recruit talent globally, convening the best teams for projects rather than maintaining standing headcount. New talent metrics and rewards will be needed—from onboarding to succession planning—with emphasis on empathy and soft skills. Since maintaining corporate culture becomes even harder with a remove workforce, companies may need to appoint chief culture officers.

Covid-19 also accelerated two trends driving change in business models: digital transformation and the corporate shift to long-term value. With virtual and digital replacing physical, adoption of automation, artificial intelligence, and augmented reality/virtual reality will surge. Effectively deploying computing power, bandwidth, cloud, and cybersecurity will define winners. The pandemic has also put human welfare and sustainability front and center. Consumers will prioritize businesses demonstrating a long-term value agenda in culture, purpose, and actions.

Imagine the unthinkable: Could corporate campuses and central business districts be hollowed out? How might they be repurposed?

A better working world: How will your corporate culture drive success in the post-pandemic world?

Amid social distancing, people are relying on social media more than ever. If they stay within their filter bubbles this could worsen polarization and diminish societal trust. As confidence in government decays because of mismanaged pandemic responses, trust will likely shift to the local level.

Consumption has declined sharply amid the pandemic, thanks to a deep recession and historic unemployment. Households are engaging in more mindful consumption, focusing on sustainable and essential purchases—likely an enduring shift.

The long-term toll on mental health of social isolation, remote work, and economic insecurity could have impacts akin to post-traumatic stress disorder; yet, the new focus on mental health may reduce stigma and increase availability of support services.

Imagine the unthinkable: Will health certificates be required for residence in certain communities?

A better working world: How will your business model anticipate post-pandemic consumer behavior?

The pandemic has unleashed a world of uncertainty. It can feel challenging to envision what the next month will bring, let alone the next year. How do you proceed? We believe a few guiding principles can help leaders chart their path through the pandemic and beyond:
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