Imagining a "Post COVID-19" Global Economy-Prospects & Possibilities Ahead: Partha S. Ghosh - Partha S Ghosh
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Imagining a “Post COVID-19” Global
Economy –
Prospects & Possibilities Ahead:
Strategic Dos & Don'ts ?
Partha S. Ghosh
May 25th 2020
Corona-virus pandemic: Avoiding the likely Armageddon?
Beyond the obvious jolts: Need for an “ego free” Global
coordination that will shape the “Essential Logic” of an
“Enlightened Civilization”
Agenda
New habits + New Preferences = New Economic
Five fundamental points
Constructs?
Organizations to reinvent the future with a fundamentally
new perspective (?)
Managing transitions through multiple points of
inflection: Do we have the will?
© Partha S Ghosh
The challenge is more serious than we ever imagined?
The Challenge?
Cases Deaths
5.5 M 0.35M
1.7 M 0.1 M
3
© Partha S Ghosh
COVID 19 RESPONSE: Innovative integration of multiple perspectives will
be essential to shape a new socio-economic equations that are more robust
Micro Economy Macro Economy
+ +
- -
Covid-19 driven
Uncertainties
4
© Partha S Ghosh
Corona-virus pandemic: Avoiding
the likely Armageddon?
© Partha S Ghosh
With increased Globalization and significantly greater population density,
infectious diseases like COVID-19 are dangerously more infectious
Number of person(s) per square kilometers
60 Number of population
2017
GLOBAL POPULATION,
2015
2016 billion
2010
2011
2000s- 2008 2009
Era of Global supply Chain 2008
50 China joined WTO in 2001
2000 2010 7.0
Population density
1980s- 1990s 2008- Present
Steady rise in population Global financial crisis
40 The rise of Japan 1990 “De-globalization”, Sino-US trade war 1980 4.5
1950s- 1970s 1980
Post WWII recovery
Rapid increase in population 1950 2.5
30
1970
1900- 1940s 1901 1.7
WWI and WWII 1960
Great Depression
20 1940
1950
1930
1920
1901 1910
Global trade development
10
Global trade, % of GDP
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62
6
© Partha S Ghosh
Source: Our world in Data, Maddison project database, World bank, HYDE (2016), UN World Population Prospects (2019) , EIU Analysis
The current pandemic COVID-19 has spread quickly to more than 180
countries within the span of four months
INCREASE OF AFFECTED POPULATION BY COUNTRY Share of Incidents
(1/22/2020 – 5/13/2020) (‰ of total population)
1.500
Emerging Deterioration Global 4.2
transmission Severely
1.300 4.9
affected
US 3.6
1.100
Spain
Italy Close to 6 million people are 2.2
900
France
Germany
directly or indirectly affected 2.1
700 3.4
UK by the spread of COVID– 19,
China 0.1
Iran
500
truly unprecedented? 1.4
Turkey 300
Belgium
1.7
100 4.7
0
1/22/2020 2/19/2020 3/18/2020 4/15/2020 5/13/2020 Worldwide 0.6
# of global
incidents (‘000)
0.5 75.2 201.4 1,958.8 4233.7
% of incidents in
top 10 countries 99% 99% 82% 79% 65%
7
*IMF GDP estimation in 2020 © Partha S Ghosh
Sources: IMF, Oxford, Census,
Global employment has been influenced in very significant fashion
Employment in countries with recommended or required workplace closures as of 22 April
%
100
Evolved into a global pandemic
Share of worlds employed living in
countries with recommended
workplace closures
80
2
Share of worlds employed living in
countries with required workplace Most western countries
closures responded with
60 recommended/ semi-
3
mandatory workplace
closure in the second Lifting of workplace
Initially disrupted around Asia half of March closures in China
while the situation
40 has worsened
elsewhere
China mandatorily 1
closed most
20
workplaces nationwide
to control the situation
0
January February March April
Total case 9,826 85,203 777,187 2,513,399
Total cases per million
1.26 10.931 99.706 322.446
7-day growth rate
627.9% 8.1% 86.4% 17.8%
8
NOTE: Data collected as of end of each month
Source: International Labour Organization, Our world in data, EIU analysis © Partha S Ghosh
Our response to Covid-19? What could have been versus where we are?
• Local demographics
Think • Local professions/jobs
Local?.......... • Local behaviors
• Local health care systems
• Local infra-structure
• Regulatory measures
• Local industry responses
Act Local?........... • Local health care responses
• Local stay at home/curfews.
?
• Global knowledge base
Leverage • Global supply chain ?
• Global practices
Global?.......... • Global travel restrictions
• Health care systems & supply
?
chain implications
Holistic • Financial/Economic
Perspective?... implications
• Capitalism versus Socialism
versus “New ism”
9
© Partha S Ghosh
Unfortunately COVID 19 has uncovered weaker instincts of humanity,
perhaps leading to Geo-economic Armageddon (?)
Degree of market
Orientation Dynamic development of Size of the bubble represent Global
2019 4Q Exports percentage of global GDP
High
Global business
environment based on 2018
Y= Degree of Liberalization
interdependence over 70
2000
Years New Geo-economic & Geo-political
1990 environment = Armageddon?
1980 • Governments more inward looking?
Medium
• Companies/businesses in survival
1970
mode?/Disruption of G-supply
1960 2020 2Q chains
1950
Deglobalization &
• Despair versus Hope? (rising
degree of –ve energy)
Low
Nationalization & Self
? Reliance in 2Qs ?
Low Medium High Degree of
Openness
X = Degree of Globalization
10
SOURCE: World Development Indicators, WTO, CEPII Working Paper 2016-14 © Partha S GhoshWe are indeed at a critical point
Conceptual
Breadth of Spread
5.5 million (May 25) Exponential increase in spread
of COVID 19? – not unlikely,
if it spreads to South
Desirable path How to ensure the spread is
contained while creating new
12,000 (Jan 31) economic buoyancy?
?
Number of Variables (that will influence the spread of virus)
11
© Partha S GhoshBeyond the obvious jolts:
Need for an “ego free”
Global coordination that will
shape the “Essential
Logic” of an “Enlightened
Civilization”
© Partha S GhoshMajor global epidemics are seemingly occurring at an alarmingly high
frequency in the last 20 years
MAJOR EPIDEMICS IN THE LAST CENTURY
Size of circle represents GDP of epicenter in the starting year of epidemic
Global trade, % of GDP SARS Swine Flu MERS COVID-19
70 China, 2002 Mexico, 2009 South Korea, 2015 Worldwide, 2020
2.6 Trillion USD 1.0 Trillion USD 1.3 Billion USD US, China, Italy, Spain
~35 Trillion USD
60
50
40
30 Hongkong Flu
China, 1968
0.7 Trillion USD
20
10 Spanish Flu
United states, 1918
0.9 Trillion USD
0
1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020
13
© Partha S Ghosh
Source: Our world in Data, 1870- 1949: Klasing and Milionis (2014) (based on Maddison) (%), 1950-2017: Penn World Tables (9.1) (%), Maddison project database, CGIDD,Impact on global GDP growth has been profound
WEEKLY GDP OF UNITED STATES CONTRIBUTION TO WORLD GDP GROWTH
(% change on a year earlier, 05/01/2008 – 02/05/2020) (% change on a year earlier*, 2008 – 2020)
Rest of world China G6**
5.0 FORECAST
6 US Brazil, Russia, India
2.5 5
4
0.0
2008 2010 2012 2014 2016 2018 2020 3
2
-2.5
1
-5.0 0
-1
-7.5
-2
-3
-10.0 May 2nd
-4
-11.84% 2008 2010 2012 2014 2016 2018 2020
-12.5
*: Estimates based on 90 economies, weighted by GDP at PPP, representing 90% of global output 14
**: Britain, Canada, France, Germany, Italy, Japan
Sources: FRBNY; Haver Analytics; IMF; Now-Casting; The Economist
© Partha S GhoshFighting COVID-19 has been expensive and will raise national debt levels
STIMULUS EXPENDITURE BY G7 AND BRIC NATIONS Expenditure
Billions USD, GDP in PPP adjusted current USD GROSS DEBT AS A PERCENT OF GDP
share of GDP
2019 Apr ’20
United States 2,388 11% 125%
Germany 1,522 34% +17
Red Zone
Japan 1,187 20% 100%
Italy 826 34%
75%
China 689 2%
US$ 10+
United Kingdom 592 19% +9
50%
+4
France 450 15%
Brazil Trillion 245 7% 25%
& e
d g e m
Canada 164 9% ce s g in m co s
van mie er nco ies -in mie
m i m
Ad ono E id- no ow ono
India 81 1% ec m co L c
e
e
Revenue and expenditure measures
Russia Below the line measures (loans, equity injection, and guarantees) 62 1%
15
© Partha S Ghosh
Source: IMF, EIU AnalysisWhile large segments of the global population who are economically
disadvantaged are increasingly vulnerable
Global Population versus Relative Earnings ($/capita) 2018
Luxembourg
120,000 116,640
GDP per capita
110,000 Current USD
100,000
90,000 Norway
81,697
80,000
70,000
Currently COVID 19 United States
60,000
Vulnerable Population largely concentrated Germany
50,000 France Canada
United Kingdom
Japan
40,000 Italy
South Korea
30,000 62,795
20,000 Congo, DR 65% South Africa
562
Philippines 6,374Colombia China Mexico BrazilRussiaTurkey
10,000 Bangladesh
Vietnam India Nigeria Indonesia
9,771 8,921
2,010 3,894
0
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Population
5.5
Billions
16
SOURCE: World Development Indicators © Partha S GhoshIn large segments of the world, practicality of physical distancing is
questionable? … and likely outcome could be dangerous?
We are indeed at a critical point
Conceptual
Breadth of Spread
Exponential increase in
5.5 million (May 25) spread of COVID 19? – not
unlikely, if it spreads to
South
Desirable path
?
Number of Variables (that will influence the spread of virus)
© Partha S Ghosh
17
*
Sources: Photo credit - Foundation for Economic Education
© Partha S GhoshAvoiding the Armageddon (?)- Need a holistic approach
Need a
Holistic Global
Approach
Myopic
Approach
18
*
Sources: Photo credit – Roywylam
© Partha S GhoshHarmonization of Macro and Micro economic initiatives will be essential to
evolve new economic models that are inclusive & transformational
High Socio- New Economic
economic Business & Models
impact is “respecting physical distancing &
optimal Health care system guidelines
Economic (Fiscal & Monetary
measures: Degree of socio-
economic impact
Harmonization of
Community/State/Nation “Economic Policies with
specific Health care guidelines”
Health care system
extremely responsive
Low High
Health care system: Degree of control
in combating the virus
Require Global perspective for
sharing knowledge & best practices
19
© Partha S GhoshHow the public and private sector measures are strategically coordinated to
fight the COVID-19 will define the new S curve
Targeted, smart NEED STRATEGIC APPROACH
W
w V
and timely Government actions are New social & economic
effective, but healthcare constructs (new industries,
system response is slow Macro economic policies - not just
I
new ways of socializing etc.)
fiscal measures but strategic
“W-SHAPED” DOWNTURN AND RECOVERY guidance, such as:
0%
ü Global health care system to fight and
avoid virus
Government
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2019 2019 2020 2020 2020 2020 2021 2021 2021 2021
Fiscal ü Help creation of new industries &
services for social distancing
L’s U
responses Prolonged economic Health issues are
depression and addressed but policy
geopolitical tension coordination fails ü Provide incentives to transform &
create new industries toward to
minimize contacts?
ü Social reengineering to shape new
Trials and behaviors/preferences
errors
Slow Quick
Response from
Testing / vaccine Testing / vaccine
take >18 months healthcare system takeNew habits + New Preferences = New Economic Constructs? © Partha S Ghosh
COVID-19 responses will shape new preferences, new suspicions, new
behaviors .. …which could open up new frontiers
Must-have Substitutes exist, e.g. online, from home
q Attitudes, policies, and the direct
experience of the pandemic are already Resources
Eating & Drinking
changing how we work, including greater
emphasis on evidence-backed authority,
Spaces
remote working, digital collaboration,
and mental health
Purchasing
Supply Chain
q Humanity will want greater focus on crisis
preparedness, systems resilience, social Intelligence
inequality, social solidarity, and access Work/Education
to health care
Connectivity
q People will demand new investments in
public goods and services and contingent Entertainment
New formats
best alternative solutions in the future
22
© Partha S GhoshStructuring a more enlightened processes…
Strategic Triangle
Strategic Game Board
Containing the Reconstruction of
Transformed
Virus the Global Economy ”Imagined”
Need for a Global &
"Re-scope"
Coordination? “Re-
imagined” Scope of
Economic
activity
Re-engineering of More and
social behaviors better of the "Re-engineer"
same
• Social distancing As is
• Remote learning/working Same Business Process Different
Sequence
• Fading confidence in institutions
• Cleaner /Self reflective lifestyle
• Digital divide
23
© Partha S GhoshStructuring a more enlightened processes…
STRATEGIC GAME BOARD
Economic Activities: Essentials Accelerators Non-essential services
Fundamentally reformed “Type B” “Type D”
Entertain-
Transformed
Sources of Economic Activities Personal ment Hospitality
services services
1. Type A: Accelerators: More and better Remote work-spaces
of the same Law Real
enforcement Estate
Scope of
Airlines
2. Type B: Re-scope Economic
“Type A” “Type C” activity
Adjust to the new environment
3. Type C: Re-engineer
Transformed or New industries Edu-
4. Type D: Imagined” & “Re-imagined cation Financials
InformationUtilities
Logistics
Technology
Energy Services
Agro Health Consumer
Communication As is
sector -care Staples
Services
Same Business Process Different
Sequence
24
© Partha S GhoshGlobal capital markets are rewarding Type A industries - highly digitized or
are considered essential by local governments
GLOBAL STOCK PERFORMANCE BY SECTOR*
Jan 1st – May 2nd % change
-80 -60 -40 -20 0 20 40 60 80 100 120 SUB-INDUSTRY PERFORMANCE
High
Health Care -1 Alibaba Health
Information Information
Information Microsoft Technology Technology Logistics
-2
Technology Zooplus Services
Health
Consumer Communication -care
Digitization
Sysco -5 Hellofresh
Staples Activision Services
Communication
Blizzard Financials
Services -6
Netflix
Consumer Real
Carnival -6 Amazon
Discretionary Estate Utilities
Dollar General Consumer
Real Estate -9
Equinix Discretionary Agro
Consumer sector
Utilities -10 Hospitality Airlines Staples
Materials -14 Petropavlovsk Materials Energy
Financials -18 Low High
Adyen Essentials
United
Industrials Airlines
-19
With the exception of Financials, sectors that are more
essential and digitized perform better
Energy -34
Average return (-10%)
25
*Covers major indexes including: S&P500, FTSE350, DAX30, MDAX, SDAX, EURONEXT100, HSI50, CSI300 © Partha S Ghosh
Source: Yahoo Finance, EIU AnalysisStrategic bets during change over to “post COVID 19”? era
Towards “Ideation/Imagination” Economy?
Accelerators: Train Adaptors: Quick Alternators &
& Employ transition transformers: Shift jobs
Type A: Shape the Type B & C: Adapt to the Type D: Reconfigured
future future Significant scale down to
New industries that Shift to on-line to practice avoid but stay in the game
could be advanced social distancing -Education, - Hospitality, Restaurant Travel,
because of COVID-19 Entertainment, Health Public transportation, Hi-touch
AI/AR, Bio-informatics, Social care/Wellness and Retailing
020926-BWL-WKF-Slides (Revise II) services
media/IT services services
26
© Partha S GhoshLooking forward, we believe development of several industries will be
greatly accelerated enabling a post COVID-19 era upon us?
Examples of applications amid
Rationale for faster acceleration
COVID-19
Automation/ qMedical robots in hospitals Mitigate human risks and ensure
Robotization qAdvanced robotics in manufacturing safety
qGenome-wide testing and analysis To speed up innovation and testing,
Artificial Intelligence qBody temperature surveillance tracing and tracing services
qVideo conferencing Empower digital transformation of all
Cloud technology qCloud computing support for vaccine industries with real-time data and
research computation
Smart City initiatives to accelerate post
qTele-health, Smart Healthcare
Internet of things qSocial-distancing management
COVID-19 to deal more effectively with
future public crises
Next generation Genomic Sequencing is critical in decoding
qRapid sequencing of the virus the virus and understanding its evolution
Genomics
3D printing can quickly make up for the
Advanced materials q3D printing for medical supplies shortage of critical components during
supply disruption
Cost efficient and renewable energy systems
Distributed energy qSmall-scale, decentralized power
will be increasingly adopted to address
Resource (DER) system system sustainability challenges
Certain images and/or photos on this page are the copyrighted property of 123RF Limited, its Contributors or
27
Licensed Partners and are being used with permission under license. These images and/or photos may not be
copied or downloaded without permission from 123RF Limited." © Partha S GhoshFor example driven by “physical distancing” we will witness a giant leap
forward in robotization in industries & service spaces
SERVICE ROBOTS FOR PROFESSIONAL USE Annual installation of industrial robots in 2018
Main Applications Unit Sales 2017-2022e ‘000 of units Share of global Rank of world
industrial robots robot density
Logistics 154,0 36.0% 20
Inspection
Service Defense
Public relation
55,2 12.9% 4
robots
Professional cleaning
Exoskeletons 40,4 9.4% 7
Filed robotics
72%
? 37,8 8.8% 1
26,7 6.2% 3
65%
58% …
50%
42%
22%
17% 4,8 1.1%
43% 27%
40% 34%
33%
4,3 1.0% 2
2017 2018 2019E 2020E 2021E 2022E 2030E
The current scale of service robot use is small, but outpacing the China has the world’s largest industrial robot market share (36%), but
growth of industrial robots, particularly in the logistics sector still ranks low in terms of robot density
28
Source: International Federation of robotics; EIU analysis
© Partha S GhoshSimilarly application of virtual and augmented reality technologies will
accelerate renewal of Type B, C and D
THE WORLDWIDE VIRTUAL REALITY MARKET
Forecasted market size of VR hardware and software, billion USD, 2016 –
2020, by platform
Mobile Console PC
18
16 GW hospital uses innovative VR
14 technology to assess its first
12 COVID-19 patient
10 Aapplications
8
6
4
2
0
2016 2017 2018 2019 2020
Virtual reality games to keep fit
during COVID-19 lockdown
29
Source: MarketWatch, The George Washington University Hospital ; Vxchnge; Statista; EIU analysis © Partha S GhoshCOVID 19 will also accelerate the rise of autonomous delivery
Benefits of autonomous vehicles Aapplications
(AVs)
JTA
Under COVID-19 pandemic, AV adoption will
benefit “contact-less” supply chain systems: • Deployed autonomous
shuttles
• Alleviate the strain on existing delivery for moving COVID-19 tests
services in Florida
• Reduce the risk of exposure for citizens and
workers
TuSimple
Post-COVID future • Self-driving truck company
- depot-to-depot without
Regulators should push policies forward human intervention
to move into a positive post-Covid future • Raised $298M funding
30
© Partha S Ghosh
Sources: TuSimple; Desktop research; EIU AnalysisIn the same spirit service industries in (Type D quadrant) powered by AI/IT
(Type A) could undergo major transformation
Wellness (and Fitness) Hospitality Education
§ Improved online education
§ Video classes are trending § AI-targeted marketing to experience to achieve
E.g. Orange Theory has free 30- incentivize people to travel and ‘live equivalency to on-campus
min work out everyday on their the moment’ schooling and online professional
website
§ Need a disaster preparedness and development programs
§ 20% of studios see increase in business continuity plan - data § More families may prefer full or
new membership, albeit an overall recovery, property loss, hygiene, partial K-12 homeschooling or
decrease in revenue workforce shortage and safety online homework
31
© Partha S GhoshCOVID 19 related spending should be deployed strategically to fund
technologies in evolving innovative solutions …to create the “New economy”
Necessary Solutions
Improved protection
Health care
response Built in redundancies AI/AR
Social Employment Genomex/ New
opportunities Work from home Bioinfo Technologies
needs ?
Less human contact
New social Sensors/
behaviors Sensing
Innovative Linkages Open Up
Possibilities
32
© Partha S Ghosh…Will require Interoperability & Uncommon connections help to open up
problem solving spaces..
& Uncommon
Connections…
33
© Partha S GhoshOrganizations have to
reinvent the future with a
fundamentally new
perspective(?)
© Partha S GhoshSo the challenge is how to develop organizational principles which will
work in the emerging environment
THE EMERGING ENVIRONMENT
(Global socio-economic dynamics)
High Degree Uncertainty
Today
Fundamental Design Principles
l Discipline & efficiency(Time &
Fuzzy Boundaries
motion study)
Well defined
boundaries
l Hierarchy of decisions (Command
& Control)
l Functional Excellence(sub
Type A optimal solutions)
Low degree Uncertainty
35
© Partha S GhoshAdopting a “Biological model” will require careful planning in adopting the
fundamentally a new construct
THE EMERGING ENVIRONMENT
(Global socio-economic dynamics)
High Degree Uncertainty l Real time adaptation (Intelligent
agility/resiliency)
l Self organizing decisions
(Cultivate and Catalyze)
l Experimental Excellence(holistic
Fuzzy Boundaries
solutions)
Well defined
boundaries
Hybrid Model versus
l Discipline & efficiency(Time &
motion study)
l Hierarchy of decisions
(Command & Control)
l Functional Excellence(sub
Cartesian Model Network Model optimal solutions)
Low degree Uncertainty
36
© Partha S GhoshOrganizations have to develop “adaptive and agility” properties at multiple
levels of decision- making hierarchy
“Outs & Ins” of the future organization
(Partha Ghosh model)
Sensing function (360 degree
perspective)
Adaptive function
(continuous adjustment to
internal & external changes)
Distributed Leadership
function (self organization
capabilities)
Activist function (Fight
Integration function antibodies that resist change)
(high speed processing to
new possibilities)
37
© Partha S GhoshManaging transitions
through multiple points
of inflection: Do we
have the will?
© Partha S GhoshSo could COIVD 19 responses address broader global issues?
Waves of “Wealth Creation Curves”
Velocity of Artificial
Value
Intelligence/
Creation
Genomex Could we create a
Miniaturization &
Global Economy which
Convergence balances the 3Es?
Engine
• Symbiosis of Multiple
Electricity Disciplines Mindsets
(Early 1900s) Rise of
East Asia
Steam Engine Rise of
(Mid 1700s)
the US
European
Infrastructure Related Industries
Renaissance
Textile, Leather, Shipping and the likes
Investment in Knowledge
39
© Partha S GhoshOrganizations should consider to embrace new economic paradigm; –
will require transition through multiple points of inflection
CONTENT OF CHANGE Structural
FROM TO
Process
Cultural
Transactional/Global Collaborative/”Glocal”
Consumption/Cost Conservation/Value
focused focused
Networked & Agile
Discrete(Silo) initiatives
initiatives
Supply chain Redundancy
Optimization Optimization
Hierarchical/Office Entrepreneurial/Remote
centric working
40
Source: PSG & A Analysis
© Partha S GhoshEnsuring Change Is Self-Perpetuating at all levels
KEY COMPONENTS OF NEW CURRICULUM
Globalization 4.0
Strategic response
to COVID 19?
Innovation
Leadership
41
41
© Partha S GhoshKey takeaways……
Corona-virus pandemic: Avoiding the likely Armageddon?
Beyond the obvious jolts: Need for an “ego free” Global
coordination that will shape the “Essential Logic” of an
“Enlightened Civilization”
Agenda
New habits + New Preferences = New Economic
Five fundamental points
Constructs?
Organizations to reinvent the future with a fundamentally
new perspective (?)
Managing transitions through multiple points of
inflection: Do we have the will?
42
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