Excess jobs. A paradox that holds true in most countries. Yet, as economic activity plummets the recession trough deepens, how will our technology-literate global community react? To hypothesise on what may come I turn to model it through using historical and empirical evidence while also considering a series of other quants and macroeconomic factors.
Corporations believed that while some jobs could be done remotely, top management could not manage this same feat. Alongside, extensive responsivities top management are also tasked with leading and governing sectors of the organisation. Yet, the current times of isolation suggests that all positions can do equally well, if not better, at home. Higher productivity and increased job satisfaction are just a sample of beneficial results from working at home, as many HBR articles pronounce. [i]
But what does this mean going forward? Nobody knows what the future holds. Yet, our increasingly globalized connection through technology suggest that the composition of our job market may be undergoing a revolutionary change. In-house economists in corporations around the world, such as JP Morgan and The Economist, would be crunching numbers to model change in hope of capturing a pattern.
Empirics of overall happier workers from home may suggest that jobs will not be limited to geographic position. For example, imagine that you are a manager of data services of Bloomberg in New York City, why would you employ a qualified member of New York’s public when you know that remote workers would be happier? The geographic advantage is reversed as it accentuates a negative correlation with attitude, results and morale. What may previously have allowed people to be eligible for certain jobs will now be utilised as the same criteria for not giving them the position.
The simple nature of life would foreshadow towards creating more functional atmospheres. Hence championing an increased desire for large conglomerates to broaden their selection to find crème de la crème. Thus, they would open some opportunities to the global economy.
Fundamental deconstruction of value
Our Italian author, Dante Alighieri, scribes “the path to paradise begins in hell’ yet he is not alone. If we look across the world, philosophers like Nietzsche posit that through pain we grow. Unprecedented times, a phrase that has been recycled over and over during COVID carrying strong negative connotations and hence misrepresenting the opportunity that will present itself post pandemic.
All around the world forced change is underway. Country towns to municipalities have been adapting in what ways they believe is best. And for most of these geographies it is peoples interests that are the criteria for governance. The ‘unprecedented times’ has a new shift of power to the people, a power that most consumers are unaware of. Fundamentally, what may be happening is that the composition of economic value itself is changing. What are goods and what are services, and what should I pay for?
‘A service is a transaction in which no physical goods are transferred from the seller to the buyer, whereas goods are items that satisfy human wants and provide utility.’[i] Hence there is a distinction between the ability to transfer goods which is a property that do not extend onto services. Social distancing has manifested changes in many industries one being that service-related industries are struggling in creating and providing value to their customers. For some companies they have been able to make a jump into embracing technological advances and incorporate their service over call, such as Telehealth, however for many changes have not been as readily available.
Previously consumers would visit retail outlets such as Zara, about 17 times a year per person[ii], hence building value in the cycle of going to the shops, locating the product and buying it. But now as this process has transitioned online, what consumers are valuing is efficiency, readability of websites and delivery time, amongst other factors. This transition has the fundamental value of what service industries are to be questioned. Why should we pay for something that is not essential?
Quintessential to growing is reflection and revaluation. As firms redesign the modus operandi we may need to brace for a shift in consumer preferences. One that places a larger emphasis on products and goods rather than services. This valuation will be especially true for economies that rely on skilled migration. With the stoppage of workforce growth due to isolation and increasingly regulated barriers to entry, who provides services will be shifted onto the domestic labour market, meaning more immediately available jobs. Will this manifest in having a balanced and more sustainable national economies, hence reducing job-specific economies forcing countries to diversify their products? Or will countries form stronger continental bonds with surrounding countries to form economies of scale, redefining supply chains worldwide? One thing is for certain: certainty is dislodged in unprecedented times.