COVID19 has thrown some serious challenges to the whole world. This was probably the most unprecedented thing in the world. Year 2020 was probably the most ambitious time for the whole world. All companies and all economies had a slight touch of negativity in 2019, but overall growth indices were fair. The bite of Coronavirus tasted bitter.
This hit is hard for most of us. This will be learning lesson for most of the countries. This situation will lead to change in game for the whole world. Many changes in strategy will come up. Some of the probable changes I have noted as below:
- Globalisation to Localisation: Instead of looking for more resources and market abroad, countries and companies will look for domestic ones. This can be a major move. World has realised that going too much global can be a dangerous move. Supply line can get cut during crisis or conflict. So, it is important to localise the production of goods, especially the essential goods. So domestic manufacturing is going to take a leap.
- Eggs on Different Basket: This is a real cause of suffering. Most of the big manufacturers, have concentrated their manufacturing units to one country. Now, the situation made that one country prone to risk. This led to disruption of supply for almost all goods. Depending on one country, will lead to unwantedly following the rules laid by them. We remember the Russia and USA conflict few years back. Even Europe wanted to stand against Russia. But they could not do so, as entire Europe moves on fuel supplied from Russia. If a company decides to move out the production units and disperse across globe, that company will no longer be over-dependent on one country. Corporate world will not only disperse their production units to different countries but also to different continents.
- Lower Dependency on Outside World: Countries will now look for resources from inside their own borders. This will open the real domestic production sector. Not only production, this will also help to explore the domestic resources. This will lead to booming domestic sectors.
- Protecting Businesses & Employment Providers: Small local businesses are quite vulnerable in nature. Being small and almost isolated, they are prone to financial crisis, organisational disorder, political disorders, disruption of supply, etc. These smaller units are quite a decent employment generator. These units also have good potential for growth. These units can be lifelines during such types of crisis. Now, every country will take steps to protect these local businesses. In future these units can boost the economy of a country.
- Health Infrastructure: Every country will now spend a considerable portion of their national budget on healthcare. They will reduce war budget and budget on zing-bang events. Healthcare is going to be priority for countries. The rural infrastructure of countries will get an upliftment. This is a going to major macro-economic change post COVID19.
- Manufacturing of Essential Goods: All countries of world will facilitate manufacturing of essential goods inside their borders. This will be a strategic move for all. This will help to cope with this type of crisis. Also, this reduces the dependency on outside world.
- Making strategic storage: There are many items which a country does not produce. One of such commodities is “oil”. No country can move without oil. So, for all types of commodities for which a country has to depend on outside world, a strategic reserve will be made. These types of reserve will keep a country in move for few days or months, in case of crisis. Many countries will facilitate this.
- Increasing the demand: With the hit of COVID19, disposable income of many has gone down. This will leave a bad impact on demand curve. Entire world is now seeing deflating demand curve. Countries will start taking measures to increase demand. This cannot happen overnight but will happen gradually.
We are expected to see a new world post COVID19. Many changes are expected on micro & macro-economic front. All those need to be good for country and society.