COVID-19 will likely accelerate social and economic changes that would otherwise take years to materialize. When the masks do finally come off, we will discover to what extent the pandemic is reshaping our social and economic behavior. Achilles Georgiu, Head of MS in Technology Management & Innovation in the Department of Economics and Business at CEU, spoke about the trends and lasting changes that we will experience.
From a technological perspective, what are the most profound changes that we will see?
COVID-19 has accelerated the digital transformation of the whole world by forcing companies, governments as well as individuals to make revolutionary changes in their lives. Simple evolutionary steps are no longer sufficient, and those who do not take radical steps will remain fallen behind or perhaps even become obsolete. The digitization of our world played a significant role with respect to how rapidly the virus spread globally. For example, low-cost flying opportunities tremendously increased the number of people traveling worldwide. One of the reasons why plane tickets are cheaper is that due to technological developments, we now possess better analytical skills and can always optimize prices to adjust them to changing needs, even at the individual level. On the other hand, due to the evolution of technology, we can immediately share knowledge about the disease at the global level, establishing global collaborative communities to fight the virus. The speed at which this evolution occurs is enormous, and sometimes even frightening. The question is: are we ready to manage it? The higher the speed the better our grip needs to be on the steering wheel for a small mistake could have catastrophic results. We need to learn how to live and survive in this accelerated digital ecosystem.
Education is one of the areas where the shift to e-solutions occurred the most rapidly. What lasting changes do you predict for education in the post-pandemic world?
Marco Iansiti and Greg Richards recently wrote in the Harvard Business Review that education is one of the “easily virtualized businesses.” That is very much true, at least in the short run. Students could easily move to virtual learning environments, and teachers could also develop online versions of their courses within weeks with some outside help. Everybody did this for two reasons. First, because it was necessary, and second, because the adoption of virtual education was also a learning experience for each participant. Personally, I believe that when this is all over, we will not return to earlier educational methods, although we will not forge ahead to a purely online educational format either. Blended learning is the future of education. We should have been doing this for many years already, but we had to wait for such a push as this in order to move forward. We need to combine the possibilities that e-learning presents with face-to-face education. Most of the lexical and theoretical elements can be absorbed online, but applying the knowledge and developing capabilities should be done in class. Soft skills, which are required now more than ever, cannot be developed in a virtual environment, or at least they are much more difficult to acquire.
It seems clear now that in the future, e-leadership and digital working environments will be a must for businesses to thrive. How do you see the workplace changing in the post-crisis era?
The overall situation will encourage more and more people to move into digital fields as digital jobs are less vulnerable than many others, for they can be performed remotely. Results can be measured for specific targets, and we still lack thousands of people in this domain. The biggest challenge for companies – in addition to adapting to new technologies – will be to overcome the lack of trust. Many employers still build their leadership culture on up-close monitoring of their employees. This is very much the case for SMEs since they do not have the appropriate monitoring and incentive systems in place that many multinationals have, and for them the only method for measuring work is time worked and the availability and utilization of the employee. The current situation has forced – within a few weeks – the need for change, as even the most skeptical leaders have had to become e-leaders and start empowering and trusting their employees. This is, I believe, one of the most significant outcomes of the current situation: in the span of a few weeks we changed more than we did in the previous 10 years, and these changes will last even once the current pandemic situation is over.
With many people’s jobs being automated, do you see a risk that a large number of people might lack the skills to compete in the new, post-crisis economy?
Yes, but this will not be the case simply because of the impact by COVID-19. Job polarization began years ago and we will witness this transformation accelerate in many other fields as well. For many years now we have been able to observe a slow and continuous decline in jobs that require routine and manual skills. Automation is replacing many of these jobs such as employees working in factories or cashiers in a supermarket, as well as many other similar activities. What might sound even more frightening is the declining demand for jobs that require cognitive skills, but which can be considered routine jobs, such as translators, accountants or even lawyers, for example. On the other hand, there are plenty of new jobs appearing that require highly cognitive skills but cannot be considered routine such as software engineering, logistical coordination, general management, or even data science. What might be surprising is that we can also observe slow but continuous growth in non-routine but manual jobs such as people working in healthcare, electrical engineering, or even plumbing.
How should companies reinvent themselves following the crisis and what types of new business models are preferable for adapting to changed consumer behavior?
The successful companies who were already on this journey before COVID-19 seem to have simplified their focus by selecting only one area. Obviously, this is also carries risks, as having all your eggs in one basket might not be enough, but it can definitely simplify the message and the mission of the company by keeping the focus on that specific target. Those who are already one step ahead have also reconsidered their way of doing business. Instead of going into the battle alone they have developed ecosystems and selected partners who could best fit into specific roles. These are not simple alliances, for this dependency on each other is on a symbiotic level. The level of trust is unquestionable, cooperation is fully transparent between the ecosystem members, and together they can even find new revenue sources that they never considered before. Customer experience is always at the center of the universe. Personally, I believe that COVID-19 will also increase the importance of employees and their experiences, elevating them to the same level as that of customers.
What are the most significant changes that are likely to remain once the pandemic situation is over?
Obviously, we will not need to keep doing everything the way we have during this interim period. We need to take a look back and assess what worked well and what needs to be revised. I strongly believe that the greatest takeaway that will outlast the pandemic is that we will have learned how to handle similar situations should they arise in the future, and we will be well prepared for them. for they are certain to occur again.