8 minute read 27 May 2020
man looking out porthole

Beyond COVID-19: what will be the crisis’s lasting impact?

Authors
Glenn Engler

EY-Parthenon Global Digital Leader; EY Americas Strategy and Transactions Digital Leader

Helping organizations shape their business strategy in a digital world. Relentlessly curious. Passionate board member. Husband. Father.

Andreas von Buchwaldt

EMEIA EY-Parthenon Strategy Leader

A strategy consultant. Experienced in private equity and technology, media and telecommunications.

Nobuko Kobayashi

EY Asia-Pacific Strategy Execution Leader

Multi-cultural thought leader in Japan. Connector and relationship builder. Embodies a bridge that connects Japan with the outside world. Specializes in the Consumer sector.

Matthew Robb

EY-Parthenon Education Managing Director

Education strategist covering entire sector: investors, public and private operators, and regulators. Multi-academy trust director. Charmed husband, father of climber and football-mad kids.

8 minute read 27 May 2020
Related topics Strategy Geostrategy

Our reflections on what the world looks like after the COVID-19 pandemic.

COVID-19 has become a unique event in modern history with as yet unknown ramifications. For the first time, we are trying to constrain a pandemic through the broad restriction of economic and social activities around the world. All of us and our businesses are currently struggling to keep things moving while protecting our past achievements. Next steps are crucial, but not necessarily evident.

The pandemic has brought simultaneously a demand and supply-side crisis that affects industry ecosystems and consumer behaviors at many different levels. Markets such as the EU and the US that companies could previously treat as “single markets” have in many respects become patchworks with local restrictions and regulations. Exacerbating the magnitude of these challenges is the uncertainty of how long these restrictions should last.

At EY-Parthenon we are also guided by the adage: We tend to overestimate changes possible in the short term and underestimate the scale of the change in the longer term. Accordingly, we have tried to set out some key questions and impacts we anticipate over the longer term, recognizing that this is not just an economic but a social and political crisis as well:

Key questions on COVID-19’s lasting impact

  • How will consumers evolve? In the short term, a substantial portion of global consumers have lost wealth, and even more are reassessing their spending priorities. The shift towards “in-home” consumption will likely be sustained even after movement restrictions lifts, though consumers will likely readopt outside leisure activities such as restaurant outings or theater visits after health threats have been sufficiently addressed.

  • What will “new work” look like? A significant portion of the workforce has made the migration from the office to working at home, a move which has further catalyzed adoption of interactivity and collaboration tools. While it remains unclear to what extent the workforce will go back to its pre-COVID-19 office culture, there is no doubt that adoption of these novel technologies is here to stay.

  • Will transformation needs be different? COVID-19 will increase adoption of previously existing cost measures such as automation. However, companies will place greater scrutiny on their supply chains: preferring the resilience and agility of redundant, local supply over the risk of maintaining limited inventories and sourcing from low-cost countries.

  • Will trust in governments go up or down? So far, strong government interventions in citizens’ private lives on behalf of the greater good have been received surprisingly well. Strong government intervention in business, including regulation and active participation, is also underway to support each countries’ economy. The future of government trust hinges on how well these measures enable each country to avoid a prolonged crisis costing human lives and livelihoods.

  • Global supply chain or islandization? While countries look increasingly inward to produce necessary equipment and supplies, we risk losing the ability for global supply chains to be drivers of social progress and wealth creation in developing and developed countries. No country can flourish entirely on its own, but it remains unclear to what extent global supply chains will change as a result of COVID-19.

  • How do we manage international crises in the future? While the pandemic has touched virtually all countries, the extent to which each has handled the fallout differs drastically. It remains unclear whether superpowers will retain their long-held leadership position on the global stage, or whether other, smaller countries will emerge to fill the void.

  • What is the road to “better”? Given that market uncertainty will likely remain present and that companies will need time to pivot their operations to a “new normal,” companies will likely need to re-orient toward creating long-term value for customers, their people and their investors. Additionally, they will need to do a better job of demonstrating that they are meeting broader societal needs.

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Summary

COVID-19 has become a unique event in modern history with as yet unknown ramifications. For the first time, we are trying to constrain a pandemic through the broad restriction of economic and social activities around the world. Accordingly, we have tried to set out some key questions and impacts we anticipate over the longer term, recognizing that this is not just an economic but a social and political crisis as well.

About this article

Authors
Glenn Engler

EY-Parthenon Global Digital Leader; EY Americas Strategy and Transactions Digital Leader

Helping organizations shape their business strategy in a digital world. Relentlessly curious. Passionate board member. Husband. Father.

Andreas von Buchwaldt

EMEIA EY-Parthenon Strategy Leader

A strategy consultant. Experienced in private equity and technology, media and telecommunications.

Nobuko Kobayashi

EY Asia-Pacific Strategy Execution Leader

Multi-cultural thought leader in Japan. Connector and relationship builder. Embodies a bridge that connects Japan with the outside world. Specializes in the Consumer sector.

Matthew Robb

EY-Parthenon Education Managing Director

Education strategist covering entire sector: investors, public and private operators, and regulators. Multi-academy trust director. Charmed husband, father of climber and football-mad kids.

Related topics Strategy Geostrategy