Pandemics: Remodelling the economy and business fabrics


WHAT was relevant last year may no longer be relevant today. In fact, what was relevant yesterday may no longer be relevant today. This is the reality of the dynamically changing pace of technology interplay in our lives.

These interplays have shaped the fabric of businesses and societal conducts: Supply, demand and preferences.

Nobody in the 1950s would have designed their business sales around telemarketing until the 1970s when long-distance calls and cost became feasible. Similar to the use of the Internet. The point is, those who were nimble to adapt to market demands and preferences are those who will survive.

Sounds like natural selection, isn’t it? Some technology advancements pre-pandemic are set along the curbs as more dominant players assert their dominance over the market. E-commerce was well under deployment in China before the 2003 SARS outbreak, but the epidemic fast-tracked its pace to become the fundamental of how commerce is done.

Similarly, drone deliveries and autonomous shuttles are now under development, and would this contactless period accelerate their foothold?

It will soon be clear. Colleges are conducting their learnings online while still conferring degrees. Will this make people question the hefty price tag on education? Works are also being done from home, while still concurring to performance targets.

Will this make people question the pertinence of in-person work? Will this mark an end to the morning rush-hour traffic? Maybe. But it certainly will change how businesses and schools model their operations. Four-day work per week policies experimented in some companies may be validated and adopted.

“Digital nomads” culture among millennials may gain more traction. The rise of online education may provide access to low-income, low-accessibility students.

The global manufacturing dominance for China may also be reassessed by multinational corporations. Perhaps other countries with low labour cost may benefit a form of global wealth distribution?

In some sense, ‘Yes’, when these countries have now higher value for their endowments. The pandemic we are facing today is a healthcare crisis — not a financial crisis. But it may lead to one, if incompetent hands are on the steering deck.

Healthcare crisis creates disruptions and can elude into a credit or liquidity crisis. Bank Negara Malaysia and the Ministry of Finance have made some pre-emptive moves, to stave the economy in these tumultuous times.

They played the right cards at the right time, but it should not be moving at a leisurely pace. However, what is happening to the economy is only the pandemic’s spillover tub. There is no point of doubling down on resources on managing the spillover tub instead of the leaking faucet.

It’s a healthcare crisis, remember? Fixing the leaking faucet will automatically manage the spillover tubs, thus reviving a real economic output, instead of “superficially” supporting the economy at the expense of inflation and national debt.

But how can we mobilise the economy in such contagious virus transmission?

Some are (too) optimistic that the virus will disarray from its dreadful course as soon as the third quarter of 2020, and everything will return to normalcy but that is less realistic, without any external interventions.

Now, what are the game-changers for this pandemic? I am no healthcare expert for a dominant view, but I do believe technology utilisation has a role to play. The economy won’t survive with prolonged lockdown.

At some point, it will need to reopen. The question is, how do we manage an open economy at an optimal operation against virus transmission.

It all comes down to three key game-changers: Testing, drugs and vaccines. The utopic case that would fully revive the economy would be through availability of vaccines.

But vaccine development is a very extensive process, thus even a conservative estimate can call it available as early as 2021. Even this will be a record-breaking development time! Given the extended time horizon, let us focus on the other two game changers for 2020 economic survival.

Even with relaxed interaction restrictions, people will still circumspect to crowd shared spaces. Public fear isn’t going to vanish simply because lesser cases are being reported, but this need not be the case!

Technology utilisation can drive up public confidence. Belligerent testing and public surveillance, paired with data analytics expertise can monitor new infections and clusters before it becomes an outbreak.

Accessible and reliable testing kits that can yield result in minutes/hours would be a catalyst to public confidence. Employers can determine who should stay out of the workforce, airlines can identify who can board flights, and social events can be held with less risk of exposure.

But aggressive testing should run in tandem with availability of proven drugs to treat symptoms and reduce fatality or severity of infected patients.

Historically, global pandemics will linger for months or perhaps years, without a vaccine. Workforces would be more poised to mobilise the economy knowing vigorous screening process is in place to identify potential outbreaks, and knowing they won’t be severely or fatally ill with available therapeutic drugs.

These measures can help revive the economy to certain productivity and salvage billions of ringgit in economic output.

The key pieces from the federal government to be given out to the public are guidance and expectations!

Market hates uncertainties. They need to model their operations around known pieces. Whatever the setbacks are with a clear expectation, businesses and communities are ingenious to develop a workaround to survive.

What they call “survival operation” today may be their day-to-day operation in times to come. It is all part of the survival race grand scheme of things.

  • Farish Jazlan is a Ph.D Researcher at Michigan State University & Business Strategy, Harvard Business School. The views expressed are of the writer and do not necessarily reflect the stand of the newspaper’s owners and editorial board.