The cost of deteriorating workers' mental health as a pandemic could reach $ 1,6 trillion over the next 10 years in the United States alone. Also, the rapid digital transfer of economies drastically changes the working, commercial and productive conditions, with the result that many companies that are not or cannot de facto adapt, disappear from the economic map. The question is whether states and businesses are ready to follow and adapt to the new realities that the pandemic crisis will establish.
In an extensive and detailed article, the World Economic Forum explains, on the one hand, why the world of economies will not be the same again after the pandemic. It also refers to the "lessons" learned by the business world and the economy in general from the pandemic crisis, and explains where economic institutions need to focus to address the dangers of the next pandemic.
Over the past year, the business landscape has become quite precarious due to prolonged uncertainty and confusion over pandemic reactions, vaccine and emerging variant virus challenges and the impact of other risks.
Businesses had to deal with dual financial and health crises, which led to new operating protocols involving employees and customers. Indicatively, remote work on an unprecedented scale, the restructuring of supply chains the many bankruptcies, consolidations and creative collaborations.
These developments and long-term risk perspectives make companies wonder how to prepare for what may lie ahead. Mainly in their mind is their survival and building their resilience. And not only in relation to the ongoing epidemic effects and their competitive position, but also with phenomena such as cyber attacks, catastrophic climate events and social unrest that require, among other things, change in the workplace and in the community.
While many companies have innovated and adapted to rapidly changing conditions, there are many that have "stagnated" which will therefore not benefit from the expected economic recovery. Businesses need to be prepared for a tumultuous upheaval during this volatile recovery period. And they need to constantly strengthen and rethink their risk reduction strategies and improve their resilience to future shocks.
Turmoil is everywhere
The industry is facing problems from all sides. And leaders must closely monitor three levels of risk: political, technological and social.
From a political point of view, companies need to know the different paths of support packages and how they can be adapted to specific sectors or types of business along with the availability of credit. Small and medium-sized enterprises, which are severely affected during the pandemic, may find it quite dark in the period following the pandemic. In the US alone, 43% of micro, small and medium-sized enterprises (MSMEs) closed between January and April - and many more are still facing permanent closure.
Many governments are also increasingly turning to protectionism in order to create more self-sufficient and self-sustaining economies. Partly in response to COVID-19, during which border closures, blockades and export restrictions have stifled extensive supply chains, companies need to keep abreast of changes in domestic policies focusing on national security and self - sufficiency. Such policies could impede access to foreign investment, as well as future merger and acquisition opportunities.
Technological developments accelerate and "shake" the business landscape. The pandemic has caused an unprecedented technological revolution for large and small businesses. Rapid digitization transformed social and work interactions overnight. E-commerce, teleconferencing, gambling, etc. have seen unprecedented growth. It was estimated that global Internet usage in 2020 increased by 30% while e-commerce increased by 20%.
This rapid digitization has also increased cyber exposure for companies and created more complex and potentially less secure networks. The Global Danger Report 2021, in fact, points to the failure of cyber security measures as a top short-term risk. During 2020, we have seen increasing cyber attacks on government agencies and companies worldwide - many have used the pandemic crisis to penetrate networks. Globally, the volume of attacks doubled from the second half of 2019 to the first half of 2020.
This "monumental" change could create potential catastrophic risks over a longer period of time. The rush to automation, in response to the need for efficiency and reduced on-the-job work, can expose companies to unpredictable financial and moral risks - especially with more socially active consumers and workers who are worried about job losses and are willing to move on. their knowledge and experience and talent elsewhere.
Social correlations also put real pressure on industry. Businesses face enhanced social control of their practices, especially in relation to the environmental, social and intergovernmental aspects of business performance (ESG) and climate change. These priority concerns are again reflected in this year's risk report, which is dominated by environmental risks.
More than ever, consumers, employees and investors expect companies to reflect their values. This became apparent as the long-term effects of the pandemic on health, the social and economic spheres, as well as the response to global social justice movements such as the Black Lives Matter (BLM). For example, last summer at the height of the BLM protests, thousands of businesses stopped advertising on social media platforms.
Transformations in the workplace and health
The pandemic has transformed the needs and requirements of workers and workplaces - whether in corporate or home offices, manufacturing facilities, stores, hospitals, distribution centers or transportation. Greater experience with distance work and flexible working hours changes expectations about how, when and where employees will work. This changes the way companies maintain the corporate culture, creativity, identity and motivation of their employees.
This reality also has a major impact on the health and well-being of workers and society at large. Businesses may suffer from productivity losses and must carefully manage employee safety and security challenges. This was evident in the early days of the pandemic, where surveys showed that 55% of workers were less productive and dedicated due to distance work.
On a broader social level, an ongoing global stress crisis exacerbated by the pandemic and the Lockdowns has produced astonishing results. Lost education, changing working conditions, job losses, isolation and economic downturn have put all ages at risk for higher rates of depression, anxiety, PTSD and loss of productivity. The cost of deteriorating mental health could rise to $ 1,6 trillion over the next 10 years in the United States alone.
Responding to truly global dangers
In addition to the public health challenges of the current crisis, governments, international organizations and companies have fought on many levels to address the global threat of the pandemic and its aftermath.
All organizations can learn a lot from the previous year. However, these "lessons" should be useful not only to tackling the remaining pandemic crisis, but more generally to be a legacy and knowledge that can respond to a range of complex, emerging threats.
Think about what was achieved when the private and public sectors came together during the crisis:
- Rapid and unprecedented development and distribution of multiple vaccines.
- · Redefining supply chains and manufacturing processes for the development of PPE and critical medical equipment.
- · The ability to switch to distance and other new ways of working even in the most heavily regulated industries.
This capacity for collaboration is good to be institutionalized - the pursuit of national and global resilience is greater than any organization and any risk.
More cooperation is needed between society - the public and the private sector. This cooperation will include, inter alia, the creation and development of stimulus programs that will encourage sustainable recovery efforts, including green infrastructure and clean energy projects. It will require public-private partnerships to upgrade employees for a rapidly evolving digital economy. And it must require the creation of emerging hedging mechanisms, which could help stabilize companies during extended crises.
In order to build and maintain resilience, it is important for businesses to follow high impact events in the short and long term. And then to be ready for effective response, creativity and collaborations. This is vital for businesses and the global community to navigate the risks and opportunities that lie ahead, strengthen their resilience to future crises, and move toward long-term prosperity.