In just a few short months, due to COVID-19, the world has completely changed. One of the most significant changes has been to the business landscape, with a global recession, industries shutting down, and workers staying at home. The pandemic has changed the way we work and live in Australia, from social distancing in businesses to the introduction of the JobKeeper scheme.
So what are the major changes? And what are their implications for the future of businesses in Australia and overseas?
With millions of Australians currently working from home, a sudden change has come over the way business is done. Economist Tim Harcourt has called the shift in working conditions one of the most significant since women entered the workforce on a large scale during World War II, and says that remote working will “probably be a permanent change in the post-corona economy”.
Looking abroad, recently it was found that 43% of Americans would prefer to continue to work from home in the future.
This shift in working conditions has implications for public transport, business structures and communication, overall mental health, and makes employment more accessible for parents and disabled workers. Research has also shown that productivity goes up when employees work remotely and flexibly.
A major outcome of remote working has been a greater reliance on technology: specifically home-working software for meetings and file-sharing which have seen a dramatic rise in downloads since March.
Companies which have been placing more reliance in digitization in the past years have seen less economic impact due to COVID-19, as the transition to working from home came naturally. But those businesses who have resisted changes in technology or been unable to implement them have found themselves faced with either rapidly introducing digital change, or being forced to shut up shop.
Industries that require face-to-face interaction such as hospitality, travel, and entertainment have taken an unavoidable hit. It’s still uncertain what the future of these industries will look like, but it’s certain that virtual businesses are going to play a much larger role in the future of the business landscape.
As Australia begins to reopen various sectors in a series of stages, businesses are understandably wary about further virus outbreaks causing another economic downturn. An important lesson to take from the first outbreak is that businesses need to undergo consistent, ongoing learning in their operations.
Business and entrepreneurship expert Felix Arndt explains that in the face of a crisis “businesses must remain true to their vision, be empathetic to stakeholders, make quick decisions and adjust those decisions, if necessary, frequently and transparently on the basis of new information in order to adapt quickly”.
When it comes to reopening, leaders must be prepared to be just as flexible, and open to learning from other sectors.
In the face of global shutdowns and economic fallout, international trade and investment have come almost to a complete standstill. While it’s still early days to see how this will impact the business landscape in Australia in the future, Australian authorities have made it clear that at least during the crisis, foreign investments will be under intense scrutiny.
The World Economic Forum says that while these temporary measures make sense, “the tricky part is not to make them stick once the health emergency subsides”, in order to ensure prosperous and open economic borders.
In the context of these seismic global and local shifts in the way business is conducted, the future is uncertain. It seems likely that higher rates of remote work and digitization will be around to stay, with positive impacts for some groups but perhaps unfavourably for industries reliant on in-person interactions. As businesses begin to reopen over the next few months in a more protectionist Australia, we will see the lasting impacts of the ongoing COVID-19 pandemic unfold.