THE WORLD ECONOMIC FORUM – As every email introduction has reminded us in 2020, we’re living in “unprecedented times”.
No doubt, even after a viable vaccine is released to the general public and things begin to return to some semblance of normalcy, there will be long lasting effects on society and the economy. It’s been said that COVID-19 has hit fast forward on a number of trends, from e-commerce to workplace culture.
Today, we’ll highlight five of these accelerating trends.
The following article uses charts and data from new book Signals (hardcover, ebook) which covers the 27 macro trends transforming the global economy and markets. In some cases, where appropriate, we’ve added in the most recent projections and data.
Fast forward to today, and screen time is up across the board, with some of the most dramatic increases seen among kids and teenagers. 44 percent of people under the age of 18 now report four hours or more of screen time per day – up from 21 percent prior to the pandemic.
Gaming is another digital segment that has benefited from the pandemic. Video game revenue spiked in the springtime, and sales have remained strong going further into 2020. Companies are hoping that casual gamers won over during lockdown will continue playing once the pandemic has come to an end.
Even as more workplaces and schools begin to operate normally again, it’s doubtful that screen time will drop back down to pre-COVID levels.
#2: The big consumer shake-up
The consumer economy has been innovating on two fronts: making physical buying as “frictionless” as possible, and making e-commerce as nimble as possible. COVID-19 broke old habits and sped up that evolution.
Innovations in real world shopping appear to be moving in the direction of cashierless checkouts, but in order for that model to work, people first need to embrace contactless payment methods such as mobile wallets and cards with tap payment.
So far, the pandemic has been an accelerant in moving people away from cash and pin-and-swipe credit cards in lagging markets. Once people get used to the convenience of contactless payments, it’s likely they’ll continue using those methods.
Much like the gaming industry, e-commerce companies like Amazon are hoping that people who dabbled with online ordering during the pandemic months, will convert into lifelong customers.
Acceleration signal: E-commerce penetration projections have shifted upward.
In hindsight, 2020 could be an inflection point where e-commerce gained a much bigger slice of the overall retail pie.
#3: Peak globalization
Globalization went on a tear starting from the mid-1980s until it hit a plateau during the financial crisis. Since that point, global trade as a percentage of GDP has flat-lined in the face of trade wars, and now COVID-19.
Trade was obviously impacted by the pandemic, and it’s too early to say what the long-term effects will be. One thing that is clear is that the information component of globalization is becoming an even more important piece of the world’s economic puzzle.
Even before COVID-19 took hold, the global services trade was growing 60 percent faster than the goods trade, and was valued at approximately $13.4 trillion in 2019.
Acceleration signal: The dip in merchandise trade looks eerily similar to the one that took place in 2008.
#4: The wealth chasm
On the high end of the wealth spectrum, billionaires are worth more than ever.
Meanwhile, in the broader economy, inequality has grown over the last few decades. Those in the top 50 percent wealth bracket have seen increasing gains, while the bottom 50 percent have seen stagnation.
This issue is sure to be compounded by economic turmoil brought on by COVID-19. Younger generations face the dual challenges of being more likely to be negatively impacted by the pandemic, while also being the least likely to have savings to cover an interruption in income.
In fact, nearly half of people in the 18–24 year old age group have nothing saved at all.
The longer the economy is affected by COVID-19 measures, the more of a wedge will be driven between people who have continued working and those who are employed in impacted industries (e.g. tourism, events).
Acceleration signal: Growth in the net worth of billionaires has been largely unaffected by COVID-19.
#5: The flexible workplace
As of 2019, over half of companies that didn’t have a flexible or remote workplace policy cited “longstanding company policy” as the reason. In other words, that is just the way things have always worked.
Of course, the pandemic has forced many companies to rethink these policies.
This grand experiment in remote work and distributed teams will have an impact on office life as we know it, potentially reshaping the entire “office economy”. The impact is already being felt, with global commercial property investment volume falling by 48 percent in Q3 2020.
Acceleration signal: Thousands of people are moving out of pricy urban areas, presumably because they are able to work remotely from a cheaper location. – World Economic Forum