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The explosion of Covid-19 may have fuelled the economy into endowing automated services, e-commerce websites are booming and most of the companies have learned to be on the go whilst they continue to stay at home. Although it has certainly halted economic activity and put the world into recession, there’s no stopping for automation and AI.
Historically, depressions caused by the Spanish flu (1918) and World War II (1939-45) have provoked automation anxiety. Covid-19 is often outlined as a War-like event. It has temporarily ceased manufacturing activities, shut down warehouses, and has led to disturbances in the income of middle as well as lower-level citizens. Companies are willing to go above and beyond to protect their workers and thus, have caved to the online world of business.
The question that arises is, does a more automated workforce ease the economic damage or worsen it? We know that India is a highly labor-intensive country where unskilled laborers dominate the country. So how does this affect the coronavirus pandemic?
According to IMF’s Chief Economist, Gita Gopinath, there is a possible loss of $9 trillion in global domestic product.
Automation and AI will play a crucial role during this time, as it will lift productivity and economic growth. At the same time, millions of people worldwide may have to switch jobs or enhance their skills. According to WEF, nearly 6.1 million jobs would be generated in the field of automation between 2020 – 2022. This new wave of technology and computing power is about to immerse retailers, manufacturers, and marketers into a virtual space altogether. This pandemic will also lead to a change in the pattern of consumer behavior, which means consumers may prefer automated services over face-to-face interactions.
The IFR (International Federation of Robotics) reported that the cost of robots has dropped to a certain extent and this trend continues to enable wide adoption of the same. Countries like South Korea and China have adopted this technology way before the pandemic arose. According to a classified report, 12.5 million manufacturing jobs vanished in China between the years 2013-2017 since robots have taken over. This pandemic can most definitely accelerate the speed in other countries. Due to tremendous disruptions in the world economy, caused by the global supply chain, this would only assist to accelerate automation as companies seek to compensate for higher labor costs. This will lead to an increase in efficiency to get the economy back on track.
Digital Payment Vs Physical Money
There have been constant efforts to curb the circulation of physical money. We already have the technology to pay and transact through digital platforms and use highly secure biometric authentication at the point of transaction. For instance; 87 percent of transactions in Sweden are executed purely in a digital fashion.
As a result, this trend will benefit the health and safety of every business, especially small ones as they would have digital ledgers, which would ultimately lead to the elimination of middlemen since customers would directly pay the money into the seller’s digital wallet. Digitizing payment getaways would make it easier and simpler for individuals to file their income taxes and for the government bodies to make sure they are being paid, making the tedious process quicker and more efficient.
Valdis Dombrovskis, European Commission vice-president for financial services, is trying to help the process along. He recently tweeted
“Time to swap your coins for payment cards — safer for containing coronavirus.”
Are high-income jobs pandemic-proof? According to some reports analyzed by Citi and Oxford Martin School, 52 percent of the US workforce can work remotely, which means high-income jobs are harder to automate.
Social Distancing, Still A Norm?
Another snapshot that is noticed is, buying behavior after Covid-19 will heavily rely on e-commerce platforms. Since people have become all the more cautious, digital efforts will aid businesses and balance the risk of losing out on customers or getting closer to customers. Businesses will continue serving their needs, while still maintaining the required social distances. Proper digital solutions, can help businesses to hone their abilities and build strong capabilities for B2C, B2B, or B2B2C business models. Online players such as Amazon, Flipkart, BigBasket, etc. are thriving, and many brick-and-mortar stores have moved to systems where the customers have to place an order, pay through digital payment apps, and pick up kerbside.
In a nutshell…
Covid-19 highlighted many such exercises that must be carried on even after it comes to an end. Companies will most likely adapt to Social distancing since e-commerce gave them a push in the business, similarly, customers will get used to online purchasing. People will tend to shift to online modes of payment rather than cash; it’s not only secure but also hygienic. The transformation into automated services will reduce operational errors caused by humans. All in all, Covid-19 has opened up the minds of people and has benefited the economy in some way!
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