For years, we had gotten used to living in a world without any barriers. And suddenly, people across the globe were deprived of this freedom in the span of a few weeks. So is the scenario in which coronavirus will stop globalisation plausible?
Globalisation and workforce
Not so long ago, traveling from one continent to another was a piece of cake. Now, even a visit to a neighboring country has become to be a challenge or even illegal. Tourists had to cancel their travel plans. Businesses had to adapt to conducting deals and negotiations via phone or videoconference. However, the group that has been the most affected is economic immigrants. Unlike previous years, they are now unable to go to other countries to perform seasonal work. The same applies to qualified specialists and professional athletes who visit different countries on business. While some restrictions are lifted, others are being reintroduced as entrepreneurs continue to learn how to function in this new, complex reality where globalisation gradually passes into oblivion due to the coronavirus.
How has the coronavirus hindered global trade and production?
Transportation of goods is another problem. To reduce storage costs, many manufacturers have switched to just-in-time delivery and today we clearly see why this strategy is so risky. Now, manufacturing companies are probably hastily working on creating appropriate conditions to store even small stocks, in case of situations in which the supply chain is disrupted again as a result of ocean, road, and air transport restrictions.
If we were to use sports nomenclature, it can be stated that globalisation loses 0-2 to the coronavirus. And still, we have taken into account solely the movement of goods and people. Perhaps as the consequence of the pandemic, we’ll reappreciate domestic production of key goods. In the United States, people have actually realized that being fully dependent on other countries is dangerous. It’s been calculated that over 70% of the pharmaceutical ingredients sold in the US are produced outside the country. Consequently, it can be assumed that domestic suppliers will become more significant again, even despite the fact that they’re more expensive than their market rivals from the other end of the world.
Remote working on a global scale
The pandemic has contributed to another significant change in the reality of the labor market – remote working has gained in popularity in practically all possible professions. The decision whether this work style will be adopted for longer will certainly be determined by the productivity of employees performing their duties from homes. However, it’s already known that implementing this solution for good can be extremely beneficial for companies and will allow them to significantly reduce operating costs such as rent and utilities. This, on the other hand, gives numerous possibilities to recruiters who, once shackled by geographic constraints, now have access to a much larger pool of job applicants. Now, we can fairly give one point to globalisation.
Globalisation vs. coronavirus. What consequences should you expect?
Almost everyone is affected by the coronavirus. Employees have lost their jobs, entrepreneurs have had to halt their operations due to lack of supplies, travel bans, or other restrictions. Moreover, whole countries suffer as tax revenues have decreased dramatically. Let’s hope that the lesson from the current events won’t be extremely harsh. However, one thing can be stated for sure. The world is about to change and the level of globalisation we’ve witnessed over the last few years won’t go back to normal immediately. But it’s worth keeping in mind that there are also people who can significantly benefit from the current state of affairs. Probably the least negative changes will take place in industries revolving around digital activities, which have become an anchor of normality. Therefore, cross-border payments and outsourcing will continue to enjoy popularity. It’s even reasonable to predict that these solutions will become more prominent as many companies are already moving their businesses online or at least using the online resources as a means of reaching potential customers.