Global Capitalism Will Change. But How to Get Ready for It?
Suddenly, everything we were used to doing up until now has changed dramatically. Our personal and professional routines have shifted in another direction due to a novel virus that has turned into a pandemic within a very short time. If you are struggling to find a silver lining in this situation, you are not alone. Many of us are anxious about the upcoming political, social, and economic changes. There is no perfect formula on how to overcome this particular situation, but the past has already taught us a lesson—in every crisis forward-thinking and proactive people thrive.
It’s very likely that the current form of global capitalism with its multi-step, multi-country supply chains is going to take a hard hit from the COVID-19 crisis. And while people are generally pretty bad at making predictions, there are already some basic outlines of the big questions that mankind is going to face sometime very soon.
Isolationism vs. Global Solidarity
As the brilliant Israeli historian Harari puts it, we have two big crossroads ahead of us. The first is about our privacy—are we going to slip into totalitarian social oversight or are we going to thrive in a booming civil society? He’s not wrong with his observation that extreme political measures, once implemented, tend to stay in place for a long, long time.
The second question is impacting the current state of business even more. Are we, as a society, going to choose the path of 19th-century nationalistic isolationism or choose global solidarity? Harari is firm in his position, suggesting that if we choose isolationism, we will not only make this crisis last longer, but also set the foundations for new, even worse (social, political?) catastrophes. And again, he’s not wrong—after all, he has the first half of the 20th century as a crown witness.
The Very Nature of Global Business Is Changing
No matter what we choose, it’s becoming obvious that the very nature of global capitalism is going to change. Companies running global supply chains with multiple different manufacturing and assembly locations were already under a lot of pressure. Political, social, and environmental pressure, of course, but the coronavirus crisis opens a whole new perspective. As Shannon K. O’Neil suggests:
“Factory closings in afflicted areas have left other manufacturers—as well as hospitals, pharmacies, supermarkets, and retail stores—bereft of inventories and products. On the other side of the pandemic, more companies will demand to know more about where their supplies come from and will trade off efficiency for redundancy. Governments will intervene as well, forcing what they consider strategic industries to have domestic backup plans and reserves. Profitability will fall, but supply stability should rise.”
That last sentence should probably make all of us feel better—and it does, at least in my case. There is one big obvious implication of O’Neil’s statement: Everybody will have to make critical changes to how they do business. And since over 70% of companies have already undergone or currently are going through an inevitable digital transformation, everybody will have to change and evolve how they work with their data.
New data-based products and processes will have to be planned, developed, and launched. Time-to-market on internal company projects across departments will be critical, as well as productivity and operational efficiency. There are a lot of opportunities—starting with the good old internet and ending with 3D printing and robotics, with everything known to mankind in between.
Sometimes keeping calm and carrying on is not enough. But we can update the message to make it relevant in these difficult times—plan ahead, don’t be scared, don’t hesitate, and don’t wait. As the COVID-19 crisis has already shown us, changes are inevitable and they are coming at breakneck speed. There is no better time than now to start planning how to survive in the world after tomorrow.