Ever since the onset of the COVID 19 pandemic all the nations are facing a unique dilemma of the “Protagoras Paradox” wherein it has become a difficult decision whether to pursue the policy of lockdown and save the precious lives of the citizens or save the economy on the other hand.
No doubt the GOI has done a tremendous job in containing the spread of the virus but it calls for equally bold, tough and quick decisions of extending financial stimuli to stop the economy from stalling. The global financial markets have gone for a tailspin and BSE, NSE numbers are in sync and this one single parameter of economic health points towards a looming recession in the economies.
The mute question is that India is not immune to this forgone conclusion of a slow down and we stare at the recessionary market framework but the positive is that India has its own very large domestic market and its dependence on exports in the overall GDP numbers is not really high. Having said this it shall be a herculean task to fend for lives and livelihood.
The recovery path depends on diverse drivers of economic growth but the five pillars of growth for self reliance spelled by the PM in his address to the nation, namely;
- Economy with potential for quantum jump
- Tech-driven system
- Intelligence-driven supply system
lay down the road map moving forward. The resolve of all the stakeholders to contribute their might in achieving this exceptional task of economic recovery in shortest possible timeframe is the need of the hour.
The economic pundits create three scenarios of economic recovery i.e. a V, a U or an L shaped economic recovery.
The V shaped recovery is when the growth rebounds despite disruption in output of products and services and it seems to be an optimistic assumption amid today’s gloom but seems very likely.
In a U shaped recovery the revival is slow with some permanent damage to some economic sectors of the economy till the time the initial growth path is restored.
The most pessimistic scenario is the L shaped recovery that indicates significant structural damage to the supply chain, the employment market, capital formation and the productivity function and it takes a long period for the economy to limp back to normalcy.
Though it seems difficult to foresee how the economic recovery of India will shape but it is clear that we shall have to learn to live with the corona virus and a targeted approach by the GOI to provide stimuli where it shall make the most positive impact is what is desired.
As an optimist and an ardent believer in the Indian entrepreneurial zeal and courage I am sure that we will witness a V shaped recovery that will bring solace to all. I am all the more convinced on this as I see clarity of thought, purpose and the concerted effort and resolve of the Indian government to kick start the economy decisively after the lockdown 3.0
This pandemic has had an impact of the market driven economies including India (though Indian economy does not fall under the ambient of market driven economies in totality) on three very important areas that will have a lasting impact on the covert and overt behavior of every individual and the organized sector, namely;
- The blow to the financial markets has eroded the wealth of the people and will result in a tendency to save more and consume less.
- With more of saving and less of spending will create a demand side problem and is an impediment in economic recovery.
- There shall be a time gap in the creation of a smooth supply chain and production will take some time to settle down.
All the above impacts seemingly look easy to overcome but will lead to newer market dynamics whereby reliance on technology and a robust supply chain shall be the harbinger to achieve sustainable growth.
An important factor to understand is microeconomics, whereby reliance on technology to do business will become more pronounced and online businesses will be the new normal. On the macroeconomic front we may find more inward looking economies but the slogan of self reliance by the present day GOI indicates creating a structural advantage for capital formation in the areas of deficiency in the economic system. Schools, colleges and HEIs being closed in many parts of the world may see e-learning and e-delivery as a smart alternative in times to come, courtesy technology. Work from home and virtual meetings have seen a surge with minimal impact on some businesses that are technology driven and this is here to stay although the impact may vary from business to business
We clearly foresee micro and macro level opportunities and challenges in the business environment and faster we are to adopt, adapt and apply new technologies and processes the better it shall be for us to overcome this adversity.
The future of work seems to be technology driven whereby one has to acclimatize to and come face to face to this new reality and become tech savvy. Technology not only brings efficiency but also helps in scaling business while maintaining social distancing as well.
Individuals will have to reinvent and re-skill themselves besides take on multitasking while on job through creativity, empathy and collaboration.
A very important change in the organizational culture that is taking shape due to the virtual mode of functioning is that it requires a special level of social skills to connect. The hierarchical structure shall stand blurred, meaning that participation shall be more purpose led than authority led.
The career oriented will have to take charge of their careers for vertical progression and add value to their persona by synergizing through their range of experiences, acquiring new skills and always eager to learn, unlearn and relearn.
An acquired skill set of managing business is very relevant today and add to this the icing of artificial intelligence, machine learning, creativity and design thinking and the opportunities that await you are immense.
We will be into a new world order post COVID-19 and it shall have an unprecedented impact unheard of on the human minds. None of the living generations have ever witnessed this unprecedented times of lockdowns, layoffs, social distancing, uncertainties etcetera, etcetera and the fear of the unknown.
But then we have to look beyond, prepare ourselves for the worst and look for opportunities that present themselves in the future. The success mantra is in investing in oneself by up-skilling and be prepared to move ahead with a sense of optimism whichever way the economy shapes.
Dr. Rajiv Kumar Maheshwary
School of Management & Commerce