Personalized and Non-Personalized services are at extreme ends of covid-19 risk with the former at high risk, and the latter, low risk. Without growth, production of one good has to be sacrificed in order to increase production of the other. Growth in production of either goods/services without sacrificing the other can only come about after a discovery of more resources/factors of production (maybe higher birth rates increasing the labor pool) or an advancement in the production technology. In Figure 1 (Point A), the world produced a certain amount of these two goods (10000 P & 20000 NP). Let us abstract that the “new economy” will only be able to produce two goods/services namely Personalized (P) and Non-Personalized (NP) (see Figure 1). The PPF is a hypothetical concept that shows combinations of two goods that an economy can produce at full employment. Having set the background, we can now discuss these labor market dynamics using the Production Possibilities Frontier (PPF). The rewards for some careers might increase while for others there may be a reversal of fortunes – potentially exacerbating income inequalities. It has to be noted though that while global income will contract in 2020 (and possibly two or three years after), there will be a lateral redistribution of income across industries. As different forms of business activities wane, new ways of doing business (selling entertainment etc.) will emerge while the world awaits going back to the olden days – if ever. This is just one of several sectors that will record Covid-19 induced enormous growth. It is projected that the global cloud-computing market will post a USD62 billion growth in 2020, up from USD233 billion in 2019. Mohit Joshi (president of business consulting, IT and outsourcing firm Infosys) contends that cloud-computing “ will not buckle” under the Covid-19 induced economic pressure. This translates to reduced disposable income at the household level – giving credence to the assessment that things may indeed take time to bounce back to pre-Covid-19 levels.ĭespite all the difficulty, there might be a silver lining. The International Monetary Fund (IMF) project that global output will contract by 3% in 2020. However, even with precautions infection gaps may still persist and it may be harder to break-even where a restaurant owner is compelled to operate at below capacity, for example, also considering suppressed demand since, for many people, it will take time to overcome fear and resume normal life (including eating out) as they did before the pandemic. These industries have suffered disproportionately relative to others as a consequence of statutory restrictions because it is in close confines and personalized face to face services where covid-19 infection thrive – in the absence of precautions. The Covid-19 pandemic has brought to a standstill the restaurant, tourism, entertainment and other industries that require the congregating of people in a single venue and those that rely on face to face interaction or close contact. A United Nations Department of Social and Economic Affairs (UNDESA) webinar on the 9th of April 2020 noted that restrictive measures to contain the pandemic had significantly hamstrung the extent of human participation in production and commerce – most notably in the personalized care and services sectors. Governments, policy-makers, scientists, researchers and other stakeholders agree that things may never be the same, at least in the short to medium term. Across the world, a “new economy” post the Covid-19 pandemic is the buzzword.
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