Big Ideas: How Covid-19 is changing the world

We are going through challenging times and the world around us is changing fast.

Working from home has gone from perk to necessity for a great number of workers. New sanitation and social distancing rules are in place to protect citizens and people on the frontline. Handshakes have been dropped from our greetings.

Even with governments introducing emergency measures to save lives and jobs, the virus has had a profound impact on daily life and the economy. Few will have imagined lockdowns, empty high streets, and closed borders to be part of their 2020.

At close to 8 million confirmed cases and more than 430,000 deaths worldwide, according to Johns Hopkins data, and despite countries reopening, it’s still impossible to say which phase of the pandemic we find ourselves in. Are we at the beginning of the end, or at the end of the beginning? Will we see a second wave of infections? When will a vaccine be ready?

We may not have all the answers to these questions, but we do know that the world will see lasting changes due to Covid-19.

To get a feel for what lies ahead, LinkedIn News editors asked experts in several countries about their Big Ideas for this post-Covid world. Is local the new global? Can mass tourism coexist with social distancing? Will climate be at the centre of the recovery?

We invite you to join us on this effort to peer into the future. What Big Idea do you think will become a permanent feature of the post-Covid world? Share in the comments or publish a post, article or video on LinkedIn with the hashtag #BigIdeas. 

Now onto our 10 Big Ideas for the post-Covid world.

1. The GCC will face an unprecedented double shock.

The crash in oil prices and the economic fallout of the coronavirus have put the energy-dependent Gulf countries in a tough place. When oil prices plunged in 2014, GCC governments reduced subsidies, imposed taxes, and came up with policies to diversify their economies away from oil. But with the global economy already deep in the worst recession since World War II according to The World Bank, today's options seem to be limited. Oil output cuts will cause a contraction in the economic output in the Gulf and a recession in the non-oil economies that is unprecedented, says Fitch. 

Governments have taken fiscal measures to offset the impact of the coronavirus on businesses and residents, with some targeting SMEs and others reducing tax burdens and other government fees. It remains unclear what would be the effect of this uncertainty on residents. Governments may either slash spending and compromise growth, or increase their debt levels to spur the economic wheel. “The choice: (i) speed up fiscal reform, with associated social pressures and preserve [Sovereign Wealth Funds] stock or (ii) slower reform - leaving future generations with less reserves”, said Khalid Howladar, Senior Managing Director at R.J. Fleming & Co.

For economist Alexandre Kateb, the oil shock will have greater repercussions on the economies than the fallout caused by the pandemic, but their combined impact will be long lasting. He expects GCC governments to scale down on some mega projects, while the focus on emerging sectors, like technology, will remain.

2. We will travel again, but it will be different.

The aviation industry, which facilitates 57% of the world tourism and supports 65.5 million jobs globally, has been hit hard by the economic fallout of the coronavirus. Coming out of the crisis, travelers are prioritizing health and safety, they’ll need to feel confident and protected for travel to restart. It begins from pre-boarding with a shift to a paperless, touchless process; automation across the entire sector is one of the changes the World Economic Forum bets on. Temperature screenings, physical distancing and wearing masks at airports and on flights will continue to be integrated in the travel industry as needed protective measures. The International Air Transport Association (IATA) also foresees that access to airports will be restricted for staff and travelers only.  

The disruption coronavirus has caused didn’t stop there, it will also control how countries reopen for air travel and tourism. A new factor emerges to determine the level of international mobility other than a strong passport: how well a country has contained the virus.

Uncertainty will be the enemy of the industry post coronavirus. Traveling will not be back to normal as long as there is an amount of uncertainty during the trip, Kashif Khalid, Regional Director, Africa & Middle East at IATA shares in a LinkedIn article.

“Currently there exists a lot of confusion, ambiguity and apprehension by potential travelers on whether they will have to undergo health testing at various parts of their journey, are borders open and visas still valid? and lastly perhaps the biggest impediment to restoring travel is the subject of mandatory quarantine. Implementing an ill thought out blanket approach to quarantining passengers potentially can deter both leisure and business traffic from returning to the skies. It will take a great amount of convincing people to travel if their journey entails a lot of uncertainty, lost time, potentially exorbitant costs and a threat to their livelihoods.” 

3. Oil will lose, renewables will win.

The coronavirus pandemic led the oil markets to witness two historical moments that will leave a mark for the years to come. The first was the negative prices territories reached by the WTI for the first time in history, and the second a historic deal reached by OPEC+ to curb global supply. Although the output cuts and gradual recovery of global demand have supported crude oil prices firming them from the April crash, the industry’s outlook is still uncertain. Squeezed margins are forcing oil producers to take drastic measures to cut spending, including slashing jobs. Some companies might not make it through the crisis, as 250 shale producers might face bankruptcy unless prices recover quickly, Financial Times reports. Other producers will look for more resilient businesses to acquire them. And the winner is.... Renewable energy, as it will be the only source that will witness growth in demand in 2020, the International Energy Agency (IEA) expects.

4. Learning will learn from Covid-19.

Technology was becoming an integral part of education before the pandemic. Global EdTech investments exceeded $18 billion last year according to Metaari, while Research and Markets estimates the market of online education to reach $350 billion by 2025. The pandemic has accelerated the integration of e-learning in our lives, with school closures affecting around 1.2 billion students in 186 countries. Students and teachers found themselves in virtual classrooms, in an unplanned experience that will reshape the educational system as we know it.  

More than half of the parents of school children in the Arab world consider the current online learning system to be “inefficient” in comparison to traditional learning, a UNESCO survey found in May, with more than 80% showing concerns that homeschooling is not providing the necessary education for their children. So how should we assess the e-learning experience post Covid-19? And what defines its success or failure?

To Dr.Waleed Al Ali, being prepared doesn’t mean having the latest technologies. Although technology is an important element, the knowledge and awareness around online learning is more important to insure its success and continuity, he says in an interview. 

May Wazzan, a Learning Expert, says “it is an opportunity to rethink the future of education [...]. Challenge the pedagogy in a way that puts the student back at the center. Challenge assumptions around the true value of contact hours and the expectation that quality education can only come at an exorbitant cost. Redefine the essential competencies and skills to teach and the most meaningful learning experiences to create”.

5. The office will be reinvented.

From the end of the open floor plan to a different system replacing what used to be common areas, experts have laid out many changes in how offices will look and operate post Covid-19. The “sneeze guard” will become the popular shield of choice, bringing back the cubical era, while some still bet on the survival of the open floor plan. An office design that would share some characteristics with a hospital is one of the long-term solutions suggested: surfaces that can withstand frequent washing, better air filtration, and more access to hand sanitizers. 

Professionals around the world will need to do a lot of adjusting. One thing that can help adjust to a changing workplace routine is resilience, as Dr. Valentina Faia, psychiatrist and therapist told LinkedIn. Reaching out to colleagues and coworkers will be very important even as it takes a different shape, and speaking out about mental health at work will become more of a necessity than it already was before the pandemic. Watch the interview below:

6. People will move less to chase jobs.

Emerging from a decade of protectionism and trade wars, globalisation found itself trapped in the web of a pandemic paralyzing its core element: movement. With anti-virus measures expected to stay for some time, countries will be looking inward trying to mitigate their economic impact and provide the needed buffers for their citizens. This will end the era that allowed workers and professionals to chase carriers, which will impact the hosting country as much as migrants’ country. The World Bank expects remittances to record the sharpest fall in recent history, dropping by 20% in 2020 compared to 2019 due to the fall of wages and employment of migrant workers. The drop in remittances will prevent the access to basic needs such as food, healthcare, and education in middle and low-income countries. It will also slash the tax revenues in migrants’ countries, impacting different sectors that might be vital, such as banking industry. On the other hand, the IMF recommends countries to retain as many migrants as they can, as they will be needed in the recovery of the hosting country’s economy. 

7. The future of retail is online and contactless.

When shops and malls closed during the lockdown, consumers headed online for nonessential shopping and a global rise in e-commerce happened. Some of these online habits will stick, New York Times technology writer Shira Ovide says, as they prove their convenience, but this will have consequences on both the consumer and the retail industry. Increased orders will mean companies will need more, smaller warehouses in multiple areas to cover demand. Fast deliveries and easy returns will be less taken for granted as they cost more.

For e-commerce companies to be able to handle high demand and grow, there will be a need to reshuffle roles and reskill employees, according to the Life after Covid-19 report by Dubai Future Foundation (DFF). The e-commerce market is set to reach Dh95.42 billion in the Middle East, Dh40.37 billion in GCC and Dh16.88 billion in the UAE, according to Dubai CommerCity. Malls will still be around, however. In a global shopping hub like Dubai, Covid-free certificates and tax-free shopping are some of the suggestions to keep shoppers around the physical stores.

Contactless and mobile payment will move from a cool feature to a need for safety and health reasons. 22% of connected consumers globally paid digitally at a physical store as of the end of March. This will require increasing purchasing limits on contactless payment. Mastercard already did in Europe and removed the need for a PIN.

8. Climate policies have gained momentum.

Halting air travel and the suspension of work in factories worldwide during the coronavirus crisis resulted in a drop in pollution levels. A permanent, global shutdown may not be a realistic approach in favor of the fight against climate change - but as the world restarts daily life, these positive effects can be the needed push towards better climate policies. 

The coronavirus crisis should be a motive to think about how a global climate crisis could be prevented or at least mitigated. In concrete terms, a new start after the pandemic must be linked to the permanent avoidance, shifting and improvement of traffic. "Covid-19 must change the way we think and act. Otherwise we will pay for the rescue from one crisis blindly with the costs of the next crisis," warns Claudia Kemfert, economist at the German Institute for Economic Research (DIW).

While experts are calling for climate change to be at the heart of global economic recovery plans, companies have a big role to play to ensure that the world after Covid-19 is built on sustainable foundations. ‘Sustainability is not against profit’, says expert Tatiana Antonelli Abella. Watch the full interview:

9. The coronavirus crisis will boost gender equality.

Women have been at the frontlines in the battle against coronavirus, they represent 70% of the health and social sector workforce globally, according to the Organization for Economic Co-operation and Development (OECD). They have been widely praised for successfully managing the sanitary emergency, countless articles have analyzed why leaders like Angela Merkel, Jacinda Ardern, Sanna Marin or Tsai Ing-wen have responded better to the pandemic than their male counterparts. According to experts, women must brace for an economic crisis that will hit them harder than men: in regular recessions the most affected sectors usually are male-dominated ones, like construction or manufacturing, but this time the coronavirus crisis will have a larger impact in retail, tourism or hospitality, sectors with high female employment shares. In addition, closures of schools and daycare centers mean that women are shouldering much of the burden at home.

But there is a silver lining: the Covid-19 crisis can bring about changes that have the potential to reduce gender inequality in the labor market in the long term. “This massive teleworking experiment will represent a dramatic leap forward: we have learnt that we can work from home, we can lead from home and the trust between employers and employees have been strengthened. Flexible work is here to stay and that poses a great opportunity for women”, says Nuria Chinchilla, professor of leadership and people management at IESE Business School and World Economic Forum advisor. Also, “confinement has forced families to adapt and share the domestic duties and this situation, if temporary, can have a great impact on promoting co-responsibility and a more equal distribution of labor in housework and childcare.”

10. Sovereign Wealth Funds will restrategize.

Sovereign Wealth Funds (SWF) around the world, with more than $8 trillion of assets and $2 trillion of assets in the Middle East, are repositioning their allocations to mitigate the effects of the pandemic on state budgets around the world. As they try to balance between spending plans and budget deficits, the SWFs of Saudi and Abu Dhabi, part of the 10 biggest SWFs in the world, are looking for investment opportunities that can secure the needed returns. For instance, the Saudi Arabian Monetary Authority (SAMA), the kingdom’s central bank, has transferred $40 billion in March and April to the Public Investment Fund (PIF) from its foreign reserves. The transfer was exceptional, made to strengthen the ‘investment capacity’ of the PIF, according to the Minister of Finance. 

Elliot Hentov, Head of Policy Research at State Street Global Advisors says that “the data does suggest that governments, instead of turning to Sovereign Wealth funds in a big way, they are using Sovereign Wealth Funds as a very consistent cash support, and then borrowing in a large scale, this is the largest bond issuing across emerging markets we’ve seen ever.” The big difference between post Covid-19 and post 2008, according to Hentov, is that this time there’s early steps of risk taking in April, there’s opportunities to buy and step back in.

Authors and editors: Salma Altantawy, Jakob Schulz and Virginia Collera. Editor-in-chief: Sandrine Chauvin. Art work: LinkedIn News/  Greg Lee, Eun Sung Do, Mehdi Ramdani - Getty Images / Lyubov Ivanova, Karim Sahib.

What big changes do you see coming up in your industry? What trends are here to stay? Share in the comments or publish a post, article or video on LinkedIn with #BigIdeas.