OUR ECONOMY AND THE FUTURE OF JOBS

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The coronavirus impact on our economy and the future of jobs: Simply explained

24 Feb 2022
- admin
India Inc. and the Way Ahead

The country’s continuing massive vaccination drive and ‘precaution’ doses starting for select categories of people the month will provide a firewall against any steep spike in Coronavirus cases amid the emergence of the Omicron variant. So, what lies ahead for India’s economy in 2022 and beyond? The Indian economy has almost caught up with the pre-pandemic growth levels and that its size in absolute terms has almost matched with the pre-pandemic year (2019) is no mean achievement after Covid-19 brought life to a grinding halt in 2020 and a part of 2021.

Also, that the government’s revenues, at least on the tax side, has been doing wonderfully well despite handing out massive stimulus to lessen the impact of the virus is something that will be etched in the history books. The World Bank, The International Monetary Fund and The World Economic Forum are among a number of global institutions that have commended India’s policy response to the pandemic, not only in protecting its own population, but also providing medical supplies and equipment to more than 150 countries.

What is the way out? The government must recognize the extent of damage to the informal sector economy and then extend benefits to them accordingly, in the upcoming Union Budget. This has been demanded by many states in their pre-budget.

Another major challenge on the face of the government is the rampant rise in prices and growing unemployment due to the closure of many small and medium industries across the country, the data for which is not available. Supply chain disruptions due to Covid border controls have already wreaked havoc on prices and are expected to further increase in cost labor if infectious Omicron spreads fast.

Learnings at SOIL

In SOIL, as part of our case study analysis and group discussions, we have often discussed the impact of COVID on various sectors for example medical care, Leisure and travel, manufacturing, education, Transportation and so on. Our Economics faculty also linked this impact mapping to Microeconomics and how various factors effect unemployment, income, recent recession. Understanding what that means for the business world has been eye opening for me. Me and my fellow batchmates really appreciate the ritual from every class where we discussed whatever was happening in the Indian economy and try to come out with the different insights and perspectives.

We learnt to look at the pandemic’s long-term influence on consumer behaviour, purchase patterns and the potential for recovery led by enhanced productivity and innovation. We also assessed this lasting impact on labor demand, job security, various occupations, and the skills required to succeed.

The ‘The future of work after COVID-19’ report by McKinsey stated that “Remote work and virtual meetings are likely to continue, albeit less intensely than at the pandemic’s peak. Perhaps the most obvious impact of COVID-19 on the labor force is the dramatic increase in employees working remotely.”

To determine how extensively remote work might persist after the pandemic, they analyzed its potential across more than 2,000 tasks used in some 800 occupations in the eight focus countries. They found that about 20 to 25 percent of the workforces in advanced economies could work from home between three and five days a week. This represents four to five times more remote work than before the pandemic and could prompt a large change in the geography of work, as individuals and companies shift out of large cities into suburbs and small cities.

Another aspect to consider was that technically some work is best done in person. Negotiations, critical business decisions, brainstorming sessions, providing sensitive feedback, and onboarding new employees are examples of activities that may lose some effectiveness when done remotely.

As the world copes with the uncertainty of the Covid-19 pandemic, India too has been working overtime, formulating its response to the crisis. With government regulations evolving to flatten the curve and manage disruption across industries, traditional ways of working have been forever changed. The move from ‘responding to the crisis’ to ‘thriving in the new normal’ will depend on how successfully organisations take their learnings into the future.

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